Home prices jumped by a whopping 7.8% from the third quarter of 2019 to the third quarter of 2020 according to the Home Price Index published by the Federal Housing Finance Agency. Click here to view the full report. This marks the fastest year-over-year increase in house prices since 2006 as demand continues to outpace the supply of homes available for sale. This also signifies that house prices have risen for 37 consecutive quarters (9 years straight), since September 2011. Here are two ways to benefit:
1: Sell Your Home with Tax-Free Capital Gains
If you’ve lived in your house as your primary residence for two out of the past five years, you may be able to sell it at a profit without having to pay capital gains taxes. The limitations on this are $500,000 of tax-free gains for married couples filing a joint tax return and $250,000 of tax-free gains for individuals or married couples filing separate tax returns. For more info, see my article: How to Get the Primary Residence Capital Gains Tax Exclusion.
- Debt consolidation – pay off other debts with higher interest rates
- Home improvements – make new indoor or outdoor improvements to your home
- Any other purpose including other large upcoming expenses
PLEASE NOTE: This article is provided for illustrative purposes only. It is not an offer or commitment to lend you money, and it is not an advertisement for a specific mortgage or interest rate. Please contact me to run the numbers for your situation.