What Inflation Means for Homeowners - Prosper and Thrive | Santander Bank

Inflation impacts the cost of everything from the food you buy at the grocery store to the gas you put in your car. So perhaps it’s no surprise that when the prices of goods and services rise, the cost of real estate does as well. Indeed, inflation has multiple effects on the housing market—and the most noticeable is an increase in home values.In addition, the Federal Reserve’s response to inflation can impact home loans. The Fed has already increased interest rates on loans to combat rising prices and is set to hike rates even more in the coming year. While this doesn’t affect homeowners who have a fixed-rate mortgage, it may price borrowers out of homes they used to be able to afford.All that’s to say—inflation will affect the housing market. And whether it proves an advantage or disadvantage depends on your current status as a mortgage holder and whether you plan to buy or sell real estate in the near term.The inflation-real estate connection Inflation refers to the increasing costs...