🏡 Home Sweet Hedge: How Owning a Home Can Protect Your Finances 💸

Hello Hampton Roads,

 

Even though June's CPI inflation number came out lower than expected, there's no denying that people don't feel the effects. For example, have you ever found yourself worrying about the constant rise in prices? Groceries, gas, and even your favorite cup of coffee seem to get more expensive by the day. It’s no wonder inflation is a hot topic! Check out this recent tweet from The Koibessi Letter to get a better grasp on how much prices have risen: 

But did you know that owning a home could be your best defense against inflation? Hard assets like real estate is a well known inflation hedge. Let’s dive into how homeownership can protect your financial future and offer you peace of mind.

1. Stable Housing Costs

Imagine this: while your friends who are renting are dealing with yearly rent hikes, you’re comfortably making the same mortgage payment month after month. When you own a home with a fixed-rate mortgage, your principal and interest payments remain steady. This means you can budget with confidence, knowing exactly what you’ll be paying in principal and interest each month, regardless of what’s happening in the rental market.

2. Appreciation in Home Value

Think of your home as a treasure chest that grows more valuable over time. Historically, real estate values have increased, often outpacing inflation. This means that as the cost of living goes up, so does the value of your property. This appreciation not only protects your initial investment but also builds your wealth. It’s like having a golden goose right in your backyard! Check out this chart which shows what a difference owning a home makes in terms of networth of owners vs renters:

3. Building Equity

Every mortgage payment you make is like putting money into a savings account. Unlike rent, which only benefits your landlord, your mortgage payments increase your home equity—the portion of your home that you truly own. Over time, this equity can become a significant financial resource, giving you options and flexibility for the future. Need funds for a big life event or a rainy day? Your home’s equity can come to the rescue.

4. Tax Advantages

Owning a home doesn’t just feel good; it can also be a smart move come tax season. You can often deduct mortgage interest, property taxes, and some home-related expenses from your taxable income. These deductions can result in substantial savings. Plus, if you decide to sell your home, you might be able to exclude some of the capital gains from your taxable income. It’s like getting a little bonus for being a homeowner!

Conclusion

In a world where prices keep climbing, owning a home can be a powerful hedge against inflation. From stable housing costs and appreciating property values to building equity and enjoying tax benefits, the advantages are clear. So why not take the leap? Homeownership could be your ticket to financial security and a brighter future.  If you'd like more information about creating a solid plan towards home ownership, you can schedule a free consultation call with me here: https://calendly.com/liz-schuyler

 

Thanks for Reading,

 

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