November 05, 2022

Major Purchases in High-Inflation Economy

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For most of 2022, inflation has hovered at around 10%, which is at a level that hasn’t been seen in 40 years.

Americans will typically limit spending when inflation is high, which brings on recession-type conditions. There are some purchases, however, that could be smart buys during this economic situation.

CHC has a look at five examples and whether you should go ahead and pull the trigger or wait until the economy is more favorable.

  1. Downsize Your Home

With interest rates rising, the housing market is beginning to cool. But if you’re looking to downsize and have paid off the mortgage on your existing home, it can still pay off to make the move. The key will be to avoid taking on a mortgage at the new property since interest rates aren’t as good of a deal as they were in previous months and years.

  1. Buying a Smartphone

Experts say that demand outweighed supply for much of 2021 when it came to purchasing a new smartphone or upgrading to the latest model, but that’s flipped in late 2022. That being said, cell phone carriers are offering good deals on upgrades that can decrease the amount you’re paying per month on your existing device.

  1. Televisions

The cost of a TV dropped 15% from the summer of 2021 to the same point in 2022, and the market remains flooded with models that likely are bigger and have more features than the TV you currently have, so now’s a great time to upgrade or add a TV in a different room.

  1. House Renovations

Construction materials remain in high demand and still carry a high cost, and contractors are also still dealing with delivery delays. So unless it’s a necessary repair, hold off on that kitchen or bathroom remodel.

  1. Buy New Furniture

Supply-chain issues are still impacting the furniture industry, causing prices to go up 10% (pacing inflation) since early 2021. Experts believe things will get back to normal in this space at some point in 2023, so the advice is to avoid new furniture purchases for at least the rest of 2022.

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