3 Ways Owning a Home Can Help You Navigate Inflation Challenges

Estimated reading time: 2 minutes

Many people choose to buy a home for stability, space, or independence. One of the largest hidden benefits of homeownership is protection from inflation. While renters may feel additional pressure from their landlords, homeowners may have a shield from rising home costs.

What is Inflation?

Inflation measures how quickly prices of goods and services rise. The most common measurement of inflation are the Consumer Price Index and the Producer Price Index, which both reflect changes in the cost of living.

How Homeownership Protects from Rising Costs

1. Tax Benefits

There are possible tax benefits of homeownership that renters can’t access. If a homeowner itemizes their deductions, they may be able to deduct their mortgage interest from their income taxes. Make sure to consult with a professional tax advisor to find out if this applies to your situation.

2. Home Price Appreciation

Like rental prices, home prices typically rise faster than inflation. According to Fannie Mae, home prices appreciated nearly 6%. As a homeowner, rising prices means you’re increasing the value of your home as you accrue your equity, making real estate one of the strongest long-term investments.

3. Fixed Payments

A fixed interest rate keeps your mortgage payments the same for the length of your loan, even as inflation and the cost of living rises. Rental payments, on the other hand, increase over time. In fact, rent prices tend to rise faster than the rate of inflation. According to Census data from 2023, the average inflation rate was 3.2%, compared to 11.6% average rent increase. These numbers increase again in 2024, with Census data reporting the average inflation rate was 2.8% with 4.4% average rental increase.

As a renter, you’re continuously paying more money without gaining any financial benefit, like equity, which is the percentage of home you truly own. Instead, renters are paying for their property owner’s mortgage.

Buy Now to Save Later

You may have heard the phrase, “marry the house, date the rate.” If you find a home you really love and can afford your monthly payment and loan costs, it’s best to not wait until rates drop. If interest rates rise, your fixed rate mortgage payment will still be locked in and affordable. If they drop, you can refinance and save money.

By not waiting to purchase a home, you’re investing in your long-term wealth! Work with a mortgage company that puts your financial needs above all. Contact us today to learn about our purchase or refinance programs!