Home prices in America are as high as ever – and there is no sign of the market showing a cold. According to a report from real estate market Zillow, average home prices in 46 of the country’s 50 largest apartments rose by more than 10% in May compared to a year ago. . And house prices have risen more than 13% on average since last year. In June, the home price in the US was $ 385,000, compared to $ 342,000 in June 2020.
All of that could be shocking news for home buyers – but the millions of homeowners in the United States are benefiting from this unprecedented rise in home prices. And there are many ways to use their home sales, including a home loan, a credit line and a cash back. But equally important is the question of how to best apply that equality. In addition to summarizing some of my own activities below, I’ve interviewed homeowners from across the US to explore different ways you can leverage your similar home improvement.
Renovate or remodel
Affecting the value of your home does not require selling it. If you’re planning to settle down, spending your budget on home improvements is a great way to save your space – and improve it. repurchase.
In 2009, Will Creech sold his modern home in the mid -1956s in Charlotte, North Carolina. “At the time, it was a bit high at $ 270,000, but now we have $ 500,000,” he said. Creech and his wife spend most of their money on home renovations, and as they discuss moving or adding improvements. new in the future, Creech is always content to stay where he is. “If the price continues to rise, I still wish nothing was done,” he said.
Some renovations can add more value to your home. According to a Homelight study, re -cleaning or re -installing wooden floors is the focus of the solution and replacement. an old cap with the highest return on investment. And, depending on the projects you choose, a portion of your loan interest may be tax deductible. See the IRS’s guideline of qualifying deductions here.
Build a new home
I am one of the millions of people who rented out their homes in the last year to use a repayment loan. Some used the cash to make an emergency deposit or pay bills. Others were used to fund building renovations, as spending on space outside the building was reduced. But I saw retirement.
When I moved to Seattle in 2012, I was shocked by the already expensive and competitive real estate market. My husband and I collected 20% for a minimum wage on an out -of -town home builder and watched the next nine years as home prices doubled – and then tripled – in our region.
We refinanced our first mortgage at a lower interest rate and knocked $ 500 off the monthly payment. The refund added $ 400 to our monthly salary. In the end, we now pay at least $ 100 a month to maintain mortgages at our center and a vacation home in Chelan, Washington, where we will live when we retire.
Get better mortgage terms
If the price increase has extended your home sales beyond 20%, this may be a good time to refinance. High home prices with low interest rates can open up new mortgage opportunities: You can shorten your loan term, cut your monthly rent or cancel your private mortgage insurance– -a policy you should have when you have less than 20% equivalent in your home.
Jacqueline Sanchez did a few moves. The real estate agent and co -owner of Invested Wallet, a personal finance website, sold his home in Omaha, Nebraska, for $ 209,000 in 2015 – and its price has continued to rise ever since. “According to Zillow, my house is $ 306,000,” he said. “With the rising cost, I refinanced to take out mortgage insurance and reduce my loan to five years.”
Buy an investment property
Becoming a landowner is a great way to earn bus income. If you generated sales through your apartment, you can convert a portion into buying an apartment.
Tawnya Redding bought her first home in downtown Portland, Oregon, in 2015. “I worked diligently to pay my mortgage down ahead of schedule,” the author said. personal money. “That, with the huge increase in housing prices in the area, I’m sitting on $ 250,000 in equity.” Redding plans to take out a home credit line, or HELOC, when the time is right. “My plan is to continue to save, build equity and be prepared for when and when the market slows or crashes,” he said.
Pay for college
The college is already expensive, and the cost of a four -year degree is expected to cost about $ 200,000 by 2036, according to Vanguard. You can use the increase in your home to help pay future bills.
That was Alexander Lowry’s plan. “We bought our home in Hamilton, Massachusetts, when I moved to the teaching area,” said Gordon College professor and father of two. “In February 2018 we closed for $ 560,000, and our home is now worth over $ 700,000.
Lowry’s children are young now. But he plans to sell the house when it is close to college. But that’s only one way when it comes to using the money to pay for education – you can either use a rebate or and HELOC. And you can pour the income into a 529 tax -free college savings plan or a Roth IRA.
Sell your home and move
The most obvious way to fund your equity is to sell your home and put the income at a lower cost on a new home. According to the National Association of Realtors, 6.5 million U.S. homeowners sold their properties last year – the highest number since 2006. But once you sell, however, you need a new place to live, which can be a significant challenge. As we noted in our article partner describing how to use equal housing, prices are high everywhere, competition is fierce and it is increasingly difficult to find an equal housing opportunity. .
But it is not possible. Perry Knight and his family sold their home in Tulsa, Oklahoma, last year for 35% more than what they paid in early 2017. The fan says bike and blogger, the financial crisis provided a good opportunity to relocate to Fort Lauderdale, Florida, to live closer to family. “The market price was a surprise to us,” Knight said. “We didn’t think about selling until we knew we were in a very good position to do so. We were all hoping to raise our family in Oklahoma at the time.” The Knights paid cash for their home in Florida and were able to live close to their families. They were also able to put aside $ 10,000 after the deal.
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