Inflation Is Affecting House Prices

We’ve been rocked by tumultuous times over the last several years. First we had the pandemic, and our economy and lives ground to an instant halt. We found ourselves staring at the four walls of our home day after day, with quarantines becoming the norm. Fortunately, things slowly eased up and we hoped to return to a more normal life like before. While we got some of our old life back, in other aspect chaos still reigned.

Throughout the pandemic, we faced supply chain shortages across many types of products, including building supplies. Then the post-pandemic boom resulted in high inflation levels not seen since decades before. These inflationary pressures have had a significant impact on the overall economy, and on our wallets and pocketbooks. They’ve also had a profound effect on the housing market.

Rising Home Prices Contributed to Inflation

As we emerged from the pandemic it’s like we, as well as the world, came to life. Freedom from restrictions and a suddenly recovered economy helped lead to a boom in buying and movement again. In addition, high employment levels put a lot more money in circulation as worker salaries increased.

Housing values began to soar, contributing to the overall inflationary spiral. Instead of selling their existing home and buying a high priced new one, many families found that adding a beautiful House Addition Sydney was an ideal option.

Governments Tamped Down on Inflation by Raising Interest Rates

In response to skyrocketing inflation, governments are attempting to slow the economy by raising interest rates. Thus, if you buy a new home now, your monthly mortgage payment will be higher than before.

Rather than paying high interest rates when selling your existing home and buying a new one, with House Addition Sydney you can add a first floor addition that lets you live in your dream  home without moving at all.

High Mortgage Rates Will Reduce New Home Starts

As mortgage rates rise in concert with government efforts to control inflation, builders begin reducing new housing starts. Thus a family that wants to move on to a bigger home will find a substantially reduced inventory of new homes.