You know inflation is soaring unless you have been hiding in a cave for the last few months. March saw inflation hit a forty-year high. Today inflation sits at 8.54%, up from 1.54% just two years ago. How can you protect your bank account from rising inflation? 

What Causes Inflation?

Inflation happens when prices increase due to a surge in demand, which leads to higher costs of production and raw materials. When a consistent demand exists for goods and there is an insufficient supply, the prices rise, resulting in inflation. Because of the need for the goods, consumers are willing to pay the inflated price.

Gasoline prices take a large part of the blame for our recent jump in inflation. The average gas price in Virginia is $4.05 per gallon; the national average is $4.19, and Northern Virginia is paying between $4.01 to $4.37 per gallon on average. Currently, the average premium gas price in Northern Virginia is $4.93 per gallon; and diesel hit an all-time high of $5.32 per gallon on May 2. 

Home Ownership Helps When Inflation Rises

Have you considered purchasing a home, weighing the pros and cons of buying now, or taking your chance, waiting for the market to turn? While ultimately, the choice to buy now or wait depends on your situation. However, homeownership can help you tackle the rising costs that accompany inflation.

Inflation attacks our financial lives, from buying milk at the store to housing costs. Both rental and home prices are soaring and unlikely to take a drastic fall anytime soon. However, if you are making a pros and cons list for buying a home, add combating inflation to your pros.

IMG_0027Source: pexels.com


Purchasing a home allows you to stabilize your most considerable monthly expense. Getting a fixed-rate mortgage will lock in your monthly housing payment for ten to 30 years. Unlike rent, which usually climbs higher with each new lease agreement, your fixed-rate mortgage never increases.

Benefits of Your Northern Virginia Home Appreciation 

Although home prices and mortgage rates are higher than last year; purchasing a home today sets you up for a long-term win. Buying today locks you in at the current interest rates.

IMG_0028Source: forbes.com

With a gallon of gas costing nearly double what it did at the beginning of last year, groceries up 10%, and energy prices up 32% of what they were a year ago, it is essential to invest your money in an asset that routinely grows in value. Home appreciation has generally grown faster than inflation throughout the last five decades. 

Inflation Rate

 

Home Ownership and Inflation

You cannot control inflation, but if you can purchase a home, you will be able to keep your budget in check by having the security of a fixed payment. Renting gives no protection from soaring housing costs and does not serve as an investment. 

 

 

 

 

Khalil El-Ghoul

"Thanks for reading! I’m passionate about empowering home buyers and sellers with professional advice and unbiased information, throughout the real estate transaction. Unlike most agents, I always put clients first. When it comes to negotiating, marketing homes, and sealing the deal, I’ve got the experience and knowledge you’re looking for. If you have any questions about moving to VA, D.C., or MD, don’t hesitate to reach out."