Inflation seems to be the word on everyone’s lips these days. We’ve been hearing about inflation in the news every day for the past couple of months. And you’ve no doubt felt the effects of inflation on your own wallet every time you go to the store or fill up your gas tank. Inflation worries may even have you rethinking your dream of buying a Honolulu home. But did you know that owning a Honolulu home can actually help to protect you from inflation? Let’s take a closer look at how homeownership can ease your inflation anxiety.
It stabilizes your monthly housing costs
During periods of inflation, it can be easier to see how homeownership can stabilize your monthly housing costs. When you rent your home, your monthly rental costs are determined by current market conditions. So during periods of inflation, monthly rental prices can increase considerably in a short period of time. But when you own a home that you purchased with a fixed-rate mortgage, then those monthly costs remain the same – they aren’t influenced by inflation. With your mortgage, you’re locked into a monthly payment that stays the same for the duration of the loan. That is one major way that owning a home can help you beat inflation.
It’s an asset that will increase in value
Secondly, when you own a home, inflation can actually work in your favor. As you’ve no doubt heard or experienced for yourself, home values have skyrocketed in Hawaii and around the country over the last two years. That means your home is worth more now than what you paid for it in the past. Your home can also increase in value when you make improvements to it, such as renovating the kitchen or building an addition. In fact, real estate is typically seen as one of the best investments you can make. While real estate may gain or lose value over the short term because of market conditions, in general, it increases in value over the long term.
It allows you to tap into your equity
Finally, owning a home lets you tap into your home equity. That’s the difference between how much you still owe on your home loan and how much your home is currently worth. When home values skyrocket during inflation, your home equity does, too. And that puts you in a good position if you’re feeling the pinch of inflation. If you’re facing financial stress because of inflation, then you can use your home equity to get you through those tough times. You can take out a home equity loan or line of credit instead of using credit cards or personal loans. These types of loans are easier to qualify for and usually offer better terms than other loans. While they are usually associated with making home improvements or financing an education, that money can be used for anything including monthly expenses.
Contact Keller Williams Honolulu today!
Are you ready to find out how being a Honolulu homeowner can be your superpower in times of inflation? Then contact Keller Williams Honolulu at 808-596-2888 or [email protected]. We are standing by to answer all your questions and help you through every step of the process!
