Here’s why inflation is a good thing for homeowners.
We all know inflation is insane right now. Mortgage interest rates are rising as a result, so I wanted to talk a little about the relationship between inflation and real estate today.
In 2021, the National Association of Realtors measured an inflation rate of 6.8%. This means that over one year, the cost of goods and services across the board grew an average of 6.8%. During the same time, real estate appreciated by an average of 18%.
The Federal Reserve aims to curb inflation by raising interest rates. If you own a property and are renting it out, you can increase your rent and your cash flow because your rate is locked in already.
Home appreciation is still far outpacing inflation, and even though rates are up, they’re still quite affordable from a historical perspective. When I started in the business, rates were in the 7% or 8% range. They’re only in the 5% range now.
If you have any questions about buying, selling, or how to use real estate to your advantage during this period of high inflation, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.