Here’s how inflation will impact the real estate market in 2022.
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Inflation is the topic of many conversations these days across all industries, including real estate. Today I have a quick update on how this rising inflation will affect the real estate market.
With inflation on the rise, we expect to see increases in rent across the board. If you’re currently renting, this could be a big problem.
On the flip side, home appreciation has consistently beat the rate of inflation over the last 50 years according to the National Association of Realtors. Inflation is better for you as a homeowner than as a renter. Your rent will go up, but if you’ve already purchased your property, your equity will increase while your monthly mortgage payment remains flat.
"Inflation will put more pressure on our housing shortage."
Inflation also affects the cost of building materials. We’ve already seen a rise in costs because of material shortages over the last couple of years, and that’s only going to go up with our record-high inflation. This is going to make new homes much more expensive and cause delays in the process. That will put more pressure on the housing shortage that’s already an issue in our area.
Considering both of these factors and the rising interest rates we’ve seen so far in 2022, it’s pretty clear that homeowners are going to be in the best position to hedge against inflation over the next few years.
If you have questions about inflation, buying a home, or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.