Mar 01, 2022

How Homeowners Can Benefit From An Inflation Hedge 

The present economy is experiencing widespread inflation. From increasing prices at the gas pump to soaring grocery shelf costs, residents across the country are obligated to face the rise in expenses. Despite surging costs, homeowners are benefiting from the inflation hedge their property ownership has granted them. With the general escalation of living expenses, real estate is no exception, so the value of properties has climbed too. 

A financial writer, Mark P. Cussen from Investopedia said, “Real estate is one of the time-honored inflation hedges. It’s a tangible asset and those tend to hold their value when inflation reigns, unlike paper assets. More specifically, as prices rise so do property values.” Homeownership is one of life’s greatest investments, especially amid economic transitions like inflation. As surrounding expenses increase, property value skyrockets, protecting homeowners with their significant assets. 

The economy’s present inflation rate sits at 6.8% which has not been nearly this high since the 1970s at 7.1%. On the contrary, consumer appreciation for home prices has grown 8.1% since the 70s. A common factor during the 1970s through 2021 has been property appreciation over inflationary circumstances, proving how valuable tangible assets are in a fluctuating market. History has proven that any category that surpasses economic inflation is where everyone wants to be and for over 50 years, it has been homeownership.

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