Why inflation should not stop you from buying a home?

If you’ve been watching the news lately, you’ve likely heard a lot about record-breaking property prices, growing consumer expenses, supply chain restrictions, and other topics. And if you’re planning to purchase a home this year, all of these inflationary fears are probably making you reconsider. 

Prices rise across the board during a period of strong inflation, according to Investopedia. While home prices aren’t immune to inflation, here are several reasons why you shouldn’t wait until 2022 to buy a home. You may also like to learn about the Blue World City.

Owning a home provides stability and security:

Home prices have been rising for some years, and analysts predict that they will continue to rise until 2022. So, as a customer, how can you protect yourself against rising prices for products and services such as food, shelter, entertainment, and other necessities? The answer can be found in housing.

You may lock in your monthly mortgage payment for the foreseeable future when you buy a property. Because of your fixed-rate mortgage, your monthly payment will remain stable while other prices rise. This ensures that the majority of your home bills are protected against inflation.

You won’t have that benefit if you rent, and you won’t be sheltered from growing housing expenses. Consider that today’s mortgage interest rates are the lowest they’ve been in decades as a further incentive to buy. 

While inflation reduces the amount of money you can purchase, low mortgage rates assist to offset this by increasing your purchasing power, allowing you to acquire more house for your money. They also assist in lowering your monthly costs. 

This is especially critical during an inflationary time, when you’ll want to shield yourself as much as possible from the effects of inflation.

Inflationary pressures and hot real estate markets can put potential purchasers between a rock and a hard place. However, market conditions may make purchasing a home today a wise move. One of them is inflation. Here’s how today’s high inflation rate will affect you now and in the future if you’re looking for a new house in 2022.

The impact of inflation on the market:

I’m sure you’ve raised an eyebrow in the grocery store recently: you’ve just bought the same thing you buy every week, but it’s costing a lot more this time. Gas prices have climbed even further, with an increase of 40% year over year (YOY). Used vehicles and utilities, among a variety of other goods, have followed suit. Overall, inflation has increased by at least 7.5 percent in the previous year, and policymakers expect it to continue to grow in the coming year as the effects of money printing spread across the economy.

Inflation has an influence on the property market. On a nationwide level, shelter has climbed 4.4 percent in the last year owing to inflation, which includes not just home sales but also rent. Housing expenses have been increasingly pricey YOY, especially with last year’s 20% increase in median house price and 17% increase in rent.

No one wants to pay exorbitant house prices, but we must consider the larger picture, as well as the long-term effects of excessive inflation. The longer inflation remains inflated, the more likely house price increases will keep pace with, if not outpace, inflation. This has a significant impact on what you can afford.

Assume you’ve saved $60,000 for a down payment, which means you could put down up to 20% on a $300,000 property. That $60,000 would be worth $55,500 a year from now, based on today’s inflation rate. As a result, you’ll need extra money to make the same 20% down payment.

At the same time, 2022 is expected to see a 16 percent year-over-year increase in home prices, implying that the same $300,000 property will sell for closer to $348,000, requiring a $69,600 down payment to achieve the 20% requirement. To put it another way, the longer you wait, the lower your purchasing power will be.

In an inflationary real estate market, how do you buy?

In today’s inflationary economy, fixed-rate mortgages are a fantastic tool, especially with rumours of interest-rate hikes in the next year. When you buy a home at today’s pricing, you’re virtually tied into a set payment — at a relatively low price, despite rising other expenditures — allowing your money to stretch farther.

As contradictory as it may seem, buying a house sooner rather than later is often the greatest way to save money. The price may appear high now, but if things continue on their current course, the sticker shock will appear to be a bargain in the future. You must conduct due diligence on any investment or market to ensure that you can afford the payments and are ready to purchase a property. However, if it passes the initial inspection, you won’t be sorry in the long run.


A fixed home cost is the best inflation hedge. As a result, you shouldn’t let it deter you from purchasing a home this year. Don’t know where to begin? Make contact with a real estate agent for experienced guidance and assistance at every stage of the home-buying process.

Author Bio

Muhammad Junaid is a CEO of VM Sol, senior Analyst, and Search Engine Expert. Extensive experience being an IT Manager in Kingdom Valley Islamabad. Work for years with local and international enterprises. Also, represent well-known brands in the UAE.