In an annual Gallup poll, Americans again chose real estate as the best long-term investment again, keeping it’s winning streak to 8 years in a row. We still keep seeing real estate gaining traction as the best long term investment (see graph below):
If you have been thinking about purchasing a home this year, this poll should reassure you. Even when inflation is rising like it is today, Americans still agree an investment like real estate truly is the best long term investment.
Why Is Real Estate a Great Investment During Times of High Inflation?
While inflation is reaching its highest level in 40 years, it’s more important than ever to understand the financial benefits of being a homeowner. Rising inflation means prices are increasing across the board, including goods, services, housing costs, and more. However, when you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increasing housing payments. James Royal, Senior Wealth Management Reporter at Bankrate, says the following:
“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”
If you currently rent, you don’t have that same benefit, and you aren’t protected from increases in your housing costs, especially rising rents.
History Shows During Inflationary Periods, Home Prices Rise as Well
As a homeowner, your home is an asset that typically increases in value over time, even during inflation. As prices rise, the value of your home does, too. And that makes buying a home a great hedge during these periods of high inflation. Natalie Campisi, Advisor Staff for Forbes, explains:
“Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times.”
Housing truly is a strong investment, especially when inflation is high. When you lock in your mortgage payment, you’re shielded from housing cost increases, and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.