The Wall Street Journal highlights the unintended impact of rising home equity on financial aid eligibility for college. Homeownership is increasingly challenging, as high property values exacerbate financial strain due to rising taxes and tight market conditions. Homeowners are reluctant to tap into their increased equity, with many facing high interest rates and potential tax implications. Additionally, while home prices have peaked post-COVID-19, they are now cooling, risking erosion of wealth without liquidating assets. This creates financial insecurity and prevents homeowners from capitalizing on their asset growth fully.
Home equity may limit financial aid for college-bound students due to rising property values, while homeowners face challenges in selling amid high interest rates and taxes.
The rise in home values has inflated net worth, yet homeowners are affected by increased taxes and a need to conserve spending.
Amid cooling home prices and financial insecurity, many current homeowners remain hesitant to utilize their increased equity, as market volatility plays a role.
Industry experts suggest that despite significant home equity growth, homeowners are hesitant to tap into it, especially older individuals.
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