Inflation is a red-hot topic right now, and for good reason: In October, the annual inflation rate rose to an alarming 6.2%. That’s the highest it’s hit since November 1990, over 30 years ago, and a steep uptick from the manageable 2% that we’ve enjoyed for the past five years.
Translated to your daily life, this means Americans are shelling out more money for just about everything, from gas for your tank to heating bills to groceries and more. Our money simply doesn’t go as far as it used to.
So what’s the impact of inflation on housing?
Not surprisingly, inflation is influencing the real estate market in a big way, too. According to a Stanford University study, residential real estate has historically been an “investment safe-haven” during inflationary periods. Researchers found that during the 1970s (another moment of surging inflation), home prices rose relative to the size of the economy. This was good news for homeowners and real estate investors, since it meant that their home’s rising value helped offset rising prices elsewhere.
If you were shopping for a new home, though, this was a major challenge—and the same may hold true today.
