And home values have increased by more than 13% on average since last year.
But just as important is the question of how to best leverage that equity.
In 2009, web designer andbloggerWill Creech bought his 1956 midcentury-modern home in Charlotte, North Carolina.
“If the value continues to climb, I would personally prefer to do nothing,” he says.
Some renovation projects can add more value to your home.
And, depending on which projects you choose, a portion of your loan interest may be tax-deductible.
See the IRS’s guide ofqualified deductions here.
Some used the cash to create an emergency fund or pay bills.
Others used it to finance home renovations, as spending opportunities outside the home narrowed.
But I had my eye on retirement.
We refinanced our originalmortgageat a lower interest rate and knocked $500 off the monthly payment.
The cash-out refinance added $400 to our monthly payment.
Jacqueline Sanchez executed a couple of these moves.
“According to Zillow, my home was worth $306,000,” she says.
Buy an investment property
Being a landlord is a great way to earn passive income.
Tawnya Redding bought her first home in a suburb of Portland, Oregon, in 2015.
“I’ve diligently worked to pay my mortgage down ahead of schedule,” thepersonal finance bloggersays.
you could use your increasing home equity to help cover the cost of tuition in the future.
That’s Alexander Lowry’s plan.
I view the rise in value as the opportunity to pay for college for our girls."
Lowry’s kids are toddlers now.
But he plans to sell the home once they’re closer to college age.
And you might pour the proceeds into a tax-advantaged 529 college savings plan or aRoth IRA.
But it’s not impossible.
“The market value was a huge surprise to us,” Knight says.
We had all the intentions of raising our family in Oklahoma at the time."
The Knights paid cash for their Florida home and were able to settle near their relatives.
They also managed to set aside $10,000 after completing the transaction.
