Why real estate is a fantastic hedge against inflation for clients.
You’ve probably heard the word “inflation” thrown out in conversation or on the news recently. We’re all feeling it on a day-to-day basis. The greatest hedge against inflation from a historical perspective is real estate. Yes, we have a lack of inventory, but that’s not the conversation we should be having with our clients.
Due to the crazy appreciation over the last few years, a lot of homeowners have pent-up equity in their properties, and they’re not getting the right information on what to do with it. Buying a new home could be the right move for your client. They can use their equity to buy something more valuable. Home appreciation always outpaces inflation over the long term.
I can go back decades to the 1970s and see that appreciation was about 9.9% and inflation was 7.1%. Even in that historically terrible economic time, appreciation was higher than inflation. That means homeowners still built equity despite a poor economy.
If you have any questions or need a more in-depth explanation of how real estate is the best possible hedge against inflation and the best way for your clients to use their equity to build future wealth, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.