Secure Your Future: Beat Inflation With Real Estate

“You will own nothing and be happy.” Owning nothing and being happy sounds like a crazy quote, but it seems to be coming to fruition in everyday life and you don't want to allow this to happen to you as an individual or as a family. Consider simple things we used to own, like VCRs and DVDs for movies. Nowadays, we merely rent a streaming service from Netflix or a movie from Amazon. These seemingly insignificant changes are contributing to more substantial shifts, like the declining rate of home ownership.

In a world where owning nothing seems like a radical concept, it's essential to consider the implications it might have on your future. As we witness shifts in everyday life, such as the declining rate of home ownership, it's crucial to protect your family against inflation and its potential consequences. Don't get caught in the renter trap; find out how to pave the way for a unique and secure lifestyle for you and your family.

Homeownership Hits A 50-Year Low

Homeownership is at a 50-year low in this country and continues to decline; it's not likely to increase any time soon. A lot of that has to do with the effects of what the Fed is doing. The Fed lowered interest rates when we had a record low supply, which set the housing market on fire, and then they doubled those interest rates almost overnight.

That created a trap for many would-be sellers – this mortgage rate lockdown effect, where a lot of potential home sellers have interest rates in the high 2% or low 3% range, and they're simply not motivated enough to sell their homes. As a result, this is reducing the supply available for first-time homebuyers to enter the marketplace.

Decline in World Reserve Currency & Inflation

Another trend to watch as we shift towards becoming more of a renter-type nation is the decline of the US dollar as a world reserve currency. We experienced an 8% decline in 2022. Why is this important? It contributes to artificially low prices and low borrowing costs here in the US. As the US dollar's status as a reserve currency diminishes, it will result in reduced access to capital. This, in turn, will lead to higher borrowing costs, elevated mortgage rates for first-time homebuyers, and potentially a decline in stock market valuations. Consequently, this could diminish the wealth effect and ownership rates across the US.

The other big headline that's affecting this trend towards Renter Nation is that we're inflating our money away. Inflation is nothing that's new but inflation at the recent elevated levels is something that we haven't seen since the 1980s. Inflation truly is a thief to people that are saving and those trying to save and purchase big assets, like their first home. Looking at the stats for the last 52 years, we find that we've lost 98% of our purchasing power in this country.

Secure Your Future: Beat Inflation, Own Real Estate

You might be asking, what can I do to protect myself and my family against this inflation? Something that typically keeps pace with inflation is hard assets such as gold or silver. However, if you want to get ahead of inflation, consider looking into real estate. Real estate acts as an inflation multiplier and enables you to not only beat inflation but also significantly increase your wealth during high inflationary periods.

Owning stuff does not ultimately create happiness, but the inverse of that of not owning stuff definitely doesn't create happiness either. True wealth is created through homeownership, homeowners have 40x the net worth of renters. 

If you're a renter residing in these high-end apartment complexes, here's what will occur: the rents will continue to increase year after year. However, if you lack the margin of safety to save up for a down payment on homeownership, you'll find yourself trapped in the status of a renter, unable to own a home or create wealth in this country. Therefore, making sacrifices today will pave the way for you to lead a unique lifestyle in the future, as Dave Ramsey says.

If you're looking into how you get out of this trap of being a renter and become a homeowner. Shoot us an email at moving@mattcurtisrealestate.com or give us a call today at (256) 333-MOVE.

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