Are you feeling the pinch of inflation? With rising costs for everything from gas to food, Americans are starting to feel the impact of inflation in their day-to-day lives. And if you’ve been thinking about making a big purchase like buying a New York home, you may be having second thoughts. Is now a good time to buy, or should you wait? The decision to buy is certainly dependent on your unique situation. But you should be aware that homeownership can actually help you combat rising prices. Here’s what you should know about how owning a home can help protect you from inflation.
Homeownership stabilizes your housing costs
During periods of inflation, the cost of everything rises. This includes food, services, gas, entertainment, and even housing costs. Inflation will cause home prices to rise and rental prices to increase. When you purchase a home, you stabilize your housing costs. Since housing is typically your largest monthly expense, this can be a great benefit. If you rent, you’ll see your monthly housing costs go up and up and up. But if you buy and take out a fixed-rate mortgage for your home, then you lock into a monthly payment during the life of that loan. So while prices may go up due to inflation, your housing payment will stay the same.
Real estate is an asset that increases in value over time
Home prices are continuing to increase, which can be an obstacle for some buyers. But if you’re able to buy a home now, those rising home prices will work to your advantage. There are many ways that the home you buy increases in value over time. Making improvements will often increase your home’s value. But there are other things that can improve your home’s value without you lifting a finger, such as a hot real estate market or inflation. While real estate may gain or lose value over the short term, it is an investment that increases in value over the long term. The longer you own your home, the more valuable it becomes.
You can leverage your home equity
Home equity is the difference between how much you still owe on your mortgage and your home’s current value. As you pay down your mortgage, your equity increases. But it also increases as home values surge across the country. You can use this equity to your advantage if you’re feeling the pinch of inflation. If you need to borrow money, then you can tap into your home equity instead of using credit cards or taking out a personal loan. Home equity loans typically have lower interest rates and they’re easier to qualify for than personal loans. They are often used to make home improvements, but they can be used for any reason – including daily living expenses. A home equity loan can be just what you need to get you through a period of financial stress.
Contact Keller New York today
Are you ready to tap into the power of being a New York homeowner? Then contact the Keller New York Bronx office at 718-697-6800 or the Eastchester – Scarsdale office at 914-713-3270 today. Let us help you find your home!