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Hedging Inflation

Dear Monica: I worry that real estate prices are too high but with inflation present, is real estate a possible hedge against inflation? Jenny D.

Dear Jenny: There are so many economic factors swirling that it’s hard to see clearly what the future will hold for real estate. If you are buying a home now and getting a mortgage, a fixed-rate mortgage would lock in your costs and protect you should interest rates rise, which they are likely to do. Rents may rise but your housing costs would stay the same. Home values also tend to rise over time so there is a good chance your real estate asset will increase in value too. 

While inflation is not a good thing, there are ways to manage it and real estate is one of them.

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