Some Homeowners Are Delaying Renovations Due To Inflation

Some Homeowners Are Delaying Renovations Due to Inflation

According to a recent report by Hippo Insurance, about 43% of all homeowners are delaying maintenance and renovations due to high inflation. This is due to high inflation raising the costs of just about everything, including buying a new home or renovating an existing property. However, this decision may ultimately be short-sighted, and could cost homeowners more in the long term.

What is Inflation?

    Put simply, inflation is an economic term for when the prices of goods and services increase overall in an economy. This means that currency undergoing inflation is effectively worth less, because you need more money to pay for the same goods and services than you previously did. The higher the inflation rate is, the more expensive things get and the more quickly price increases happen.

What Causes Inflation?

    There are a number of factors that go into inflation, many of which are complicated subjects in their own right. These include, but are not limited to:

  • Increases in the cost of raw materials, such as from a lack of supply
  • Rising labor costs, such as from increased wages or benefits
  • Declining productivity, meaning workers produce less compared to their wages
  • Increases in the amount of money in circulation, such as from minting or printing money
  • Increases in taxes, either due to tax hikes or closing tax loopholes

How Does Inflation Impact the Cost of Renovations?

    As a general rule, as inflation increases, the prices of just about everything increase as well, and renovations and maintenance are no exception. With inflation up at 8.6% this past May, the prices of renovations are increasing dramatically, to the point where previously affordable maintenance and additions have increased to a level that homeowners are no longer comfortable paying. This, in turn, leads people to put off potentially important renovations and improvements in order to save money.

Why Is Delaying Renovations a Bad Idea?

    While inflation may go up and down, it may take a long time for prices to stabilize, meaning waiting for inflation to drop could just result in you paying more later on. What’s more, the longer you put off renovating and maintaining your home, the more likely it is that you will suffer some sort of major problem, like a burst pipe or an electrical fault. Addressing these problems early will inevitably save you more money in the long run, even if it seems more expensive now.

    If you are an attorney assisting a client with a real estate transaction, you should contact the title insurers at Habitat Abstract. Our experienced staff will assist you with obtaining a title insurance policy that protects your clients and prevents unforeseen issues related to a defective title. Contact us at 1-888-99-TITLE (1-888-998-4853) or visit our contact page for more information.

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