In last week’s article, we discussed how working remote can greatly benefit homebuyers in this market. In this article, we’ll be discussing inflation and whether or not this is a good time to purchase a home. We will be referencing this blog post from Keeping Current Matters.
A few highlights from the article:
- Inflation is the highest it has been in the past 40 years
- Climbing consumer costs are leaving people fearful of making large purchases
- Invest in assests that will continually appreciate
Chances of a recession next year
Everyone is feeling the effects of inflation. Data scientists have estimated that there’s a 40% chance that the US is headed into recession next year. With a potential recession on the horizon, msot consumers are trying to stay modest with their investments.
Reasons to purchase even if a recession ensues
According to a recent report done by Redfin, “Nationwide, asking rents are up 15% from a year earlier as of January 2022”. That is an incredibly high jump in price. Although financial situations vary, we feel it is incredibly important to purchase a home if you’re in the position to do so.
Although inflation is at an all time high since 1981, we encourage people to take advantage of the matter at hand. When purchasing a home you’re able to stabilize your housing expenses and know your monthly costs. Considering you have a fixed-rate mortgage, you get to lock in a monthly payment for the duration of the loan. Unlike rents that may increase over time, there’s no guessing game involved with a mortgage.
If you look at the graph above you will see that even during average times of inflation, home prices continued to appreciate. The best strategy is to invest your money into assets that have proven to hold or gain value. In our opinion, home ownership is still the best assest one can have! Due to the short supply of inventory, average home prices will continue to rise above their list price. This will play a big factor in the next recession. If this market continues to remain a seller’s market, we can expect home prices to continue to appreciate.