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Lilo Carroll (254) 554-1292

Lilo Carroll – Proven Performance

  • Home
  • Properties
    • Sold Properties
    • Featured Listings
    • Our Area Listings
    • Search Area Listings
  • Area Information
    • Fort Hood
      • BAH Chart
    • Cities and Towns
      • Belton
      • Copperas Cove
      • Gatesville
      • Harker Heights
      • Kempner
      • Killeen
      • Lampasas
      • Nolanville
      • Salado
      • Temple
  • Tippit Homes, Inc.
    • Subdivisions
      • Three Creeks
      • Valley at Great Hills
      • Wildwood Estates
    • Floor Plans
    • About The Builder
  • Market Information
  • About Us
  • Blog
  • Testimonials

News

Become a Victim of Inflation or Benefit from It

Become a Victim of Inflation or Benefit from It

By

website-admin

Posted in Blog On June 14, 2022

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In inflationary times, currently the highest in 40 years, the purchasing power of your money diminishes each day; essentially, buying you less. The biggest threat is to be without capital assets, like a home, that are benefiting from the increase in prices.

Your money buys less gasoline now, than it did a year ago, by close to 50%. Beef prices are up about 20% since last year. Used cars are about 35% more expensive than they were a year ago. Mortgage rates are near 5% after reaching their lowest of 2.65% in January 2021.

And then, there is the price of houses. CoreLogic reports that home prices increased year over year by 20% in February 2022. Their Home Price Index indicates an annual five percent increase in prices from 2014 to 2021.

For many people, the American dream of owning a home is slipping away. Adjusting your expectations for the perfect home and when you expect to achieve it, can be a legitimate, long-term strategy to making the dream come true. By delaying the gratification of getting everything you want in a home now and making compromises that would allow you to stair-step your way into the "forever home" could be the plan to incrementally reach your goal.

Owning a home in today’s market, even if it isn’t the ultimate home, provides a significant hedge against inflation. Not only is the home appreciating faster than the rate of inflation, the mortgage on the home produces leverage that increases a homeowner’s return on their equity.

Homeowners have both the home’s appreciation and its amortization working in tandem to increase their equity. Money in a bank account or the stock market can’t compare to the potential.

$40,000 invested in a certificate of deposit earning 1% would be worth $42,040 in five years. If the same amount was invested in the stock market that earned 6% annually, it would be worth $53,529. However, if the $40,000 were invested in a $400,000 home, with a mortgage at 5% for 30 years, that appreciated at 5% annually, the equity would be close to $180,000 at the end of the same five-year period.

Connect with us and let’s put together a plan to help you benefit from inflation.

Featured Properties

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3312 Vineyard Trail

Bedrooms
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3064 sq ft
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$395,000

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4685 Allison Drive

Highly sought-after Three Creeks subdivision is located close to Stillhouse…

Bedrooms
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