Inflation and affects on Real Estate
INFLATION RATE PAST 25 YEARS
EXISTING HOMES SALES PAST 25 YEARS
If you have caught any headlines these days, the buzzword is Inflation. You may also be noticing this in your grocery bill and trips to Lowe's or Home Depot.
So what does this mean to you the Home Owner or Renter?
Well, if you are a real estate investor with rental homes, then this tends to work out well for you. People need a place to live, and rental market rates tend to rise during inflation. This is due to supply and demand issues. As interest rates rise, buyers are unable to buy as many homes as they could previously, or possibly not even be able to qualify for a loan at all. Banks tend to lend less during these times as well.
If you're a renter, then that of course is not good for you either. Most landlords will not sign long-term leases, as they will look to raise rents as often as the market will allow.
So what is there to do then? Well, if you are on the fence about buying or selling, then now may be a good time to do it, as interest rates are already starting to tick up. Your best bet is to find the home you want and lock in the low rates while you can if that is what you're looking to do.
If you going to hunker down and ride it out, make sure your mortgage is a fixed-rate loan and not a variable-rate loan. As mortgage rates adjust, it may not be at the time you really want it to.
Full articles are linked below.