Real Estate Tips for Buyers in an Uncertain Economy
If headlines surrounding the new administration’s economic policy have you anxious, you’re not alone. Tariffs, new legislation, and shakeups at government agencies like the IRS, FED, Consumer Protection Bureau, and many others are adding to the uncertainty of the domestic and global economy. It’s too early to tell what the impact will be, but here is some guidance for you as a buyer.
Real estate during periods of inflation (tariffs) 💸
Real estate as an asset
Most industry experts agree that with current tariffs and the possibility of more tariffs, inflation will begin to increase as imported goods become more expensive.
Historically:
- Real estate is a great hedge against inflation.
- Appreciating assets, like a home, fare far better than other investments.
- Home prices typically increase (appreciate) with inflation.
Real estate supply
Tariffs will make new construction more expensive, therefore inventory will remain low.
Predictions:
- Constrained supply will contribute to an increase in home prices.
- Remodeling and renovations will become more expensive, increasing demand for move-in-ready homes.
✅ Key takeaway for buyers: Could increase home prices. Could increase interest rates. NOW is a good time to buy.
Real estate during recessions 📉
Buying real estate
If economic policies of the new administration push our economy and push us into a recession, it could potentially be an even better time to buy real estate if you have the down payment and can afford the monthly mortgage.
Historically:
- Recessions typically mean fewer buyers, which increases supply and lowers prices.
- Less competition from buyers means better deals and a stronger negotiating position.
- Interest rates typically come down, meaning lower monthly payments.
✅ Key takeaway for buyers: Could lower interest rates. Nice to buy during a recession.
Real estate over the long term ❤️
The economy will always go through swings; it is cyclical and unavoidable, but over the long term, US real estate is one of the best-performing assets of the past 100 years. There is a reason home ownership is synonymous with prosperity and the American Dream. Real estate experts all agree the best time to buy real estate is when you can afford the down payment and the monthly payment. It’s not about timing the market; it’s about time in the market ;)
Need help navigating your home buying journey or just getting started? We’re here for you whenever the time is right.
