Over the past sixty years, homes have appreciated in value at an average rate of 5.56% according to the Federal Reserve Economic Data. Inflation for the same period averaged 3.7% as stated by the Bureau of Labor Statistics, making homes an effective hedge against inflation.

With a fixed-rate mortgage, your monthly principal and interest payment remains constant. As a result, while other costs may rise due to inflation, your primary housing cost (excluding taxes and insurance) remains the same, shielding you from the impact of inflation.

So, homeowners benefit by owning an asset that appreciates faster than inflation AND doesn’t cost more to own as other prices rise over time.