Americans’ opinion on the value of the real estate as an investment is climbing. That’s according to an annual survey from Gallup. Not only is real estate viewed as the best investment for the ninth year in a row, but more Americans have selected it than ever before.
The graph below shows the survey results since Gallup began asking questions in 2011. As the trend lines indicate, real estate has been gaining ground as the clear favorite for almost a decade now:
Let this poll reassure you if you’re considering purchasing a home. Even when inflation is high, like today, Americans recognize owning a home is a powerful financial decision.
How an Investment in Real Estate Can Benefit You during High Inflation
Because inflation reached its highest level in 40 years recently, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board, including goods, services, housing costs, and more. When you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increases on one of your most important budgetary items each month.
If you’re a renter, you don’t have that same benefit, and you aren’t protected from these increases as rents rise. As Danielle Hale, Chief Economist at realtor.com notes:
“Rising rents, which continue to climb at a double-digit pace . . . and the prospect of locking in a monthly housing cost in a market with widespread inflation is motivating today’s first-time homebuyers.”
When Inflation Has Risen in the Past, Home Prices Have Too
Your house is also an asset that typically increases in value over time, even during inflation. That’s because as prices rise, the value of your home does too. Mark Cussen, Financial Writer for Investopedia, puts it like this:
“There are many advantages to investing in real estate. . . . It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values. . . .”
And since rising home values help increase your equity and, by extension, your net worth, homeownership is historically a good hedge against inflation.
Bottom Line
Buying a home is a powerful decision. It’s no wonder why so many people view it as the best long-term investment, even when inflation is high. When you buy, you help shield yourself from increases in your housing costs, and you own an asset that typically gains value with time. If you want to understand better how buying a home could be an excellent investment for you, connect with a Martino Realty advisor today.
