Housing Wealth Skyrockets, but It Has an Asterisk

Those fortunate to have bought their homes before prices boomed have seen their net worth rise in recent years. But as the Wall Street Journal reports, a lot of Americans in this situation aren't exactly feeling wealthy. Much of that net worth is locked up in home equity, on paper. In the real world, meanwhile, these same people are paying ever-higher property taxes. The newspaper offers an example:

• Rocco Savage bought his home in Miami Shores, Florida, for $875,000 in 2021, and it's now worth an estimated $1.35 million. But Savage's property taxes have jumped 50% in that span, to about $21,000 annually. "If property taxes continue to rise, I feel like even if I pay off my house I'm essentially still paying rent."
• Americans now have a collective $35 trillion in home equity, up a staggering 80% from early 2020. Meanwhile, the average tax on a single-family home was $4,062 in 2023, up about 14% from 2019, according to property data firm Attom.

• Another tangible issue is that families with college-age kids might not qualify for as much financial aid because their homes are worth so much on paper.

Read the full story, which notes that taking out a loan against home equity might be one avenue for homeowners in need of cash, but rising interest rates have made that much less attractive. (More home equity stories.)