How Owning a Home Can Protect You From Inflation

You've probably heard about growing inflation if you've been watching the news today. Prices for gas, groceries and other necessities are likely to rise, affecting your daily life. These rising consumer expenditures can put a strain on your pocketbook, forcing you to reconsider any major purchases you've made to ensure they're still worthwhile.

If you've been considering buying a house this year, you're undoubtedly wondering if you should go ahead with it or if it's better to wait. While the answer is dependent on your circumstances, here are some ways that homeownership can assist you to manage inflation-related costs.

Homeownership provides security and stability.

Prices rise across the board during a period of strong inflation, according to Investopedia. This holds true for food, entertainment, and other goods and services, as well as accommodation. Rental and house prices are also on the rise. So, how can you protect yourself as a buyer from rising costs? Homeownership is the solution.

Purchasing a home helps you to budget for what is often your largest monthly expense: housing. When you receive a fixed-rate mortgage, you lock in your monthly payment for the life of your loan, which is usually 15 to 30 years. Bankrate's Senior Wealth Management Reporter, James Royal, says:

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.” 

So, even if other prices rise, your housing payment will be a consistent sum that will help you stay on track with your budget. You won't have that benefit if you rent, and you won't be sheltered from growing housing costs.

Take Advantage of Home Price Appreciation

While rising mortgage rates and housing prices mean that purchasing a home now costs more than it did a year ago, you still have the opportunity to position yourself for long-term success. Purchasing now allows you to lock in today's rates and prices before they rise.

During periods of inflation, it's extremely vital to put your money into an asset that has historically held or grown in value. The graph below shows how home price increase has exceeded inflation in almost every decade since the 1970s, making homeownership a historically good inflation hedge:

How Homeownership Can Help Shield You from Inflation | Simplifying The Market

So, how does this affect you? Home prices, according to analysts, will only rise from here due to the continuous supply and demand imbalance. Any home price appreciation that occurs after you purchase a home is excellent for your equity and net worth. And, because homes are typically assets that increase in value over time (even during inflationary periods), you may rest assured that your investment is sound.


If you're ready to buy a property, despite growing inflation, it can make sense to go ahead and do so. Let's contact if you'd like expert advise on your individual circumstances and when to buy.

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