The very best hedge against inflation: investing in a new home
“… a new home represents its highest value point in the last forty years. When adjusted against the impact of inflation over this time period, the investment in new construction unquestionably represents an unprecedented hedge against inflation.” ~Jimmy Vogt, Field Manager, TFU~
Recent trips to the grocery store reveal an obvious and troubling trend – the cost of food is rising. My weekly barometer is that very pedestrian member of the lettuce family, the lowly iceberg. Foodies will debate its merits or even reason for existing; however, my weekly monitoring of its persistent $2.49 price point tells me inflation has indeed crept into the produce section of my favorite store.
Providing sustenance is a basic need that ranks right up there with shelter. We remain most fortunate in the United States because our large, diverse, and free market economy ensures intense competition for commodities such as food and with enough creativity and focus, we can provide healthy and delicious meals for our family on a budget.
So food is getting more expensive along with electricity. Insuring our automobiles seems to be costing more. And gasoline? I refuse to comment.
Nonetheless, there exists a powerful weapon that is a wonderful hedge against inflation: a new home. In this pitched battle, the lesson is this:
- ‘hard’ assets (your home) will win, and
- ‘soft’ assets (your wallet’s contents) will lose.
Today, a new home represents its highest value point in the last forty years. When adjusted against the impact of inflation over this time period, the investment in new construction unquestionably represents an unprecedented hedge against inflation.
Inflation continues to creep into our daily lives. Investing in a new home remains the best recipe for negating some of its impact. Add to this recipe a few of your own potent ingredients. structural timbers, SIPs, and energy sipping technology capable of creating true comfort – and you have a satisfying meal with no heartburn or indigestion.
And our lowly iceberg lettuce? Quarter a crisp head for your dinner guests, spread around a liberal portion of pungent, chunky Roquefort, and decorate with crispy bacon. Along with living in a new Timber Frame home, you simply cannot lose!