Are You Worried About Inflation?

Owning a Home Has Proven It Is One Of The Best Ways to Hedge Against It!!

Home prices have historically tended to outperform inflation over long periods, making real estate one of the most reliable ways households build wealth. Inflation measures the general increase in prices across an economy—often tracked in the United States using the Consumer Price Index. While inflation steadily erodes the purchasing power of money, residential real estate values have typically grown at a faster pace. This means that homeowners often see the real (inflation-adjusted) value of their property rise over time, helping preserve and expand their wealth. This graph illustrates the relationship of home prices to the rate of inflation (CPI) since 1980.

The following factors drive the trend for home values to outpace inflation:

• Property values are tied to scarce physical assets—land in desirable areas.

• As populations grow, incomes rise, and urban areas develop, demand for housing increases while supply is limited by geography, zoning, and construction costs. These pressures push home values upward, frequently faster than the overall price level measured by the Consumer Price Index. In many regions, especially in major metropolitan areas, housing demand has consistently exceeded supply, reinforcing this long-term price growth.

• Leverage. Most homeowners purchase property using mortgages, allowing them to control a large asset with a relatively small down payment. If home prices rise faster than inflation, the gains are realized on the full value of the property rather than just the initial investment. Over time, inflation can also make fixed mortgage payments easier to afford in real terms because wages and prices tend to rise while the loan payment remains constant.

• Finally, housing often benefits from improvements and economic development in surrounding communities. Infrastructure investments, new businesses, better schools, and neighborhood revitalization can all increase property values beyond general inflation. Combined with the structural limits on housing supply, these forces help explain why home prices have historically tended to grow faster than inflation over long time horizons, making homeownership both a place to live and a potential long-term financial asset.

With The Price of Homes So High How Do I Get Into The Market If I Don’t Already Own???

Interest rates for 30 years fixed mortgages currently hover around 5.50%. That is the lowest it has been in a number of years and it makes a huge difference in affordability! And remember you can always refinance should rates go down. As the saying goes “You marry the house and date the rate”!

There are numerous programs that, not only offer buyers a low down payment (generally as low as 3%), but also offer down payment assistance programs to first time buyers (typically those who haven’t owned in three years). In fact, some of these down payment assistance programs offer grants which do not need to be paid back! A few examples of these are:

• MassHousing Mortgage

  • Down payment assistance up to $25,000–$30,000 depending on income

  • Fixed-rate mortgage through approved lenders

  • Available statewide for single-family homes, condos, and small multi-family homes

• ONE Mortgage / ONE+ Program

  • 3% down payment for condos or single-family homes

  • No private mortgage insurance (PMI) 

  • Discounted fixed interest rates

  • Can include up to ~$50,000 in assistance in some cases 

• Boston First-Time Homebuyer Grants

  If purchasing within Boston city limits:

  • Grant up to $50,000 toward down payment or closing costs depending on income.

Want To Get Started???

If you would like to get started on the road to home ownership and building equity in a property I would be happy to work with you and guide you through the entire process from start through closing on your first home!!! Feel free to reach out to me!