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Discussing Inflation & The Market

Discussing Inflation & The Market

Today we’re discussing why inflation is on the rise and why it matters.

What is going on with inflation in our economy? How does inflation affect the real estate market? Today I’ll answer these questions and share a couple of resources you can use to stay up to date on inflation rates and the value of your money.

First, what is inflation? Simply put, inflation occurs when the value of a dollar goes down while the price of products goes up. Is that what’s happening right now? A great resource to consult is USInflationCalculator.com. There, you can see the value of the dollar is today and compare it to any time in American history back to 1913.

So are we in a market where inflation is on the rise? All economists point to the fact that we are, and the calculator also shows that the value of today’s dollar is worth less than it was yesterday.

“Make sure that you’re aware of the value of your dollar in the current market.”

The reasons for that are often due to the political and monetary policies that come out of the White House. Statistically speaking, we see inflation consistently rising because of our use of debt and an influx of new money into the market. Another good tool to help understand this issue is USDebtClock.com, which allows you to identify how many dollars are currently in the market according to the U.S. Treasury and compare that to the past. That will help you figure out why the value of a product may be going down while the price goes up.

This is happening in real estate, as well. The combination of our absorption rate (how quickly homes are scooped up) and inflation mean that we’re getting hit twice when it comes to pricing homes. That’s why it’s important to make sure that you’re aware of the value of your dollar in the current market. Also, keep in mind that international affairs like the Russia and Ukraine crisis could also correlate with inflation rates.

If you have any questions about how these factors affect your specific situation or real estate goals, don’t hesitate to give us a call or send us an email. We’d love to be your resource.

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Caitie Neal

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