Americans Have $35 Trillion in Housing Wealth—and It’s Costing Them (higher property and capital gains taxes and less college financial aid)

Surging home equity is all the more important in a declining stock market. But it’s come with rising property taxes and higher hurdles for borrowing.

By Veronica Dagher and Anne Tergesen. Excerpts:

"Americans have hit an odd contradiction: They have amassed $35 trillion of wealth in their homes, yet many feel less well off because of it.

Home equity [the portion of their home they own outright] has climbed nearly 80% since early 2020—up from $19.5 trillion—thanks to a turbocharged rise in house prices. That was about twice the rise in financial wealth including stocks and bonds as of the end of 2024, according to the Federal Reserve.

Yet rising home values also often translate into higher costs, such as taxes. Lots of equity can bring down college financial aid for families. And cashing in on the wealth is difficult: High interest rates and prices have held back home sales—and the prospect of big capital-gains tax bills is spurring some to hold on to the homes."

"homeowners may increasingly look to tap their home equity. However, high interest rates and tight lending standards make that difficult."

"Home equity is calculated by taking the estimated value of a home and subtracting the mortgage debt attached to it. The value isn’t locked in until a sale."

"The average homeowner with a mortgage had $313,000 of equity entering 2025"

"Home prices have increased 47% between February 2020 and February of this year"

"home equity is up even more. That’s because mortgage debt amplifies returns by allowing homeowners to invest the bank’s money, too. When home price gains exceed a homeowner’s mortgage interest payment, the excess return belongs to the homeowner"

"In the fourth quarter of last year, consumers tapped only 0.41% of their available home equity, well below the 0.92% quarterly average for the decade before the Fed started raising interest rates in 2022"

"Homeownership costs, including insurance and maintenance, are a growing burden as well."

"The average tax on single-family homes in the U.S. was $4,062 in 2023, about a 14% increase from $3,561 in 2019"

"Average property taxes rose more than 106% in Akron, Ohio, from 2021 to 2023. They were up 52.7% in Montgomery, Ala., and 66% in Pittsburgh."

"But people are cutting into their savings to pay the tax increases"

"When owners do sell, more owe capital-gains taxes. 

Even though home prices have surged since the pandemic began, the amounts sellers can exclude from the capital-gains tax on their profits—$250,000 for single filers and $500,000 for married couples filing jointly—aren’t adjusted for inflation.

"In 2023, approximately 8% of home sales generated profits that may have exceeded the $500,000 capital-gains tax exemption limit for married couples. That’s more than double the share in 2019"

"Capital-gains taxes are calculated by subtracting the home’s purchase price, adjusted for capital improvements like renovations, from the sale price"

"The tax bill can encourage people to hold on to their homes, rather than sell, leaving their home equity untapped."

"Home equity that remains locked up can cost families when it comes to college financial aid."

"Institutions including Colby College, New York University and Emory University sometimes consider home equity as part of their wealth calculations. They are among a group of about 200 schools that use an aid application known as the CSS Profile."

"means $100,000 in home equity could reduce a family’s financial aid eligibility by roughly $5,000"

There’s little evidence that subsidies and protections have substantially raised the number of children women have over their lifetime

See They Want More Babies: Now They Have Friends in the White House by Lydia DePillis of The NY Times. Excerpts: 

"In designing policy requests for federal legislators, however, pronatalists run into a problem: There’s little evidence that subsidies and protections have substantially raised the number of children women have over their lifetime. It’s not for lack of trying by low-fertility countries including Norway, Japan and South Korea. The few nations that have arrested their declines, like Hungary and the Czech Republic, adopted more sustained and generous incentives than appear politically viable in the United States."

"That’s why, for the purpose of adding babies, there’s an emerging understanding that cultural factors are crucial. The most fertile country in the developed world is Israel, at 2.9 children per woman, with its hard-to-replicate combination of intense nationalism and widespread religiosity."

Related posts:

 

Would you and your significant other get married if the government paid you $14,000? What if they paid the two of you to have children? (2025)

 

Worldwide Efforts to Reverse the Baby Shortage Are Falling Flat: Subsidized minivans, no income taxes: Countries have rolled out a range of benefits to encourage bigger families, with no luck (2024) 

 

Can you choose when to have your baby born if it brings you some money? (2024)

 

A number of women who put off having babies after the 2007-09 recession are forgoing them altogether; more educated women and student debt also contribute to decline in birth rates (2018)

 

Did The Recession Help Lower The Birth Rate? (2011)

The Economy Affects The Birth Rate (2010)

Should the Government Pay People to Have Sex? (2007) 

There is no such thing as a free lunch: Removing Artificial Food Dyes Will Be Difficult

See How Prevalent Are Dyes in Foods? We Crunched the Numbers by Jesse Newman, Andrew Mollica and Roshan Fernandez of The WSJ. Excerpts:

"A Wall Street Journal analysis of a federal database detailing food and beverage ingredients found that more than one in 10 products contain at least one artificial dye. More than 40% of items with the dyes use three or more"

"The FDA has said the dyes it has approved are safe when used in accordance with agency regulations. The FDA said that most children experience no adverse effects from eating foods with the added colors"

"The U.S. has joined other countries in banning the dye (Red 3) from foods based on studies that linked it to cancer in some animals, though the FDA said Red 3 doesn’t have the same effect in humans. 

Food makers have until early 2027 to strip the dye from their U.S. products"

"Most new product launches today feature natural colors instead of synthetic ones"

"Many well-established American food products still use artificial dyes because it can be difficult and expensive to replicate the same colors naturally"

"Synthetic colors are more closely regulated by the FDA, and can be mass-produced with consistency from one batch to the next. They also have a shelf life of years."

"Colors derived from natural sources can be sensitive to heat, light and changes in acidity. Because their complex supply chains are susceptible to droughts and other happenings, natural dyes cost manufacturers about 10 times more than their artificial equivalents"

The Seasonally Adjusted CPI Was down 0.05% in March

Here are the changes in the seasonally adjusted CPI each of the last six months:

Oct  0.2265%

Nov  0.2805%

Dec  0.3647% 

Jan  0.4669%

Feb 0.2160%

Mar -0.0500% 

 

The last decline before this was last June when it was down 0.0029%.

 

See Consumer Price Index for All Urban Consumers: All Items in U.S. City Average from FRED (Federal Reserve Economic Data) compiled by the Research Division at the Federal Reserve Bank of St. Louis for data on the seasonally adjusted CPI.

 

That site shows a graph but if you click on the Download button you will get the actual numbers in Microsoft Excel.

 

The Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL) was 319.775 in Feb. and 319.615 in Mar. Since 319.615/319.775 = 0.9995, that means it was up 0.0500% (since 1 - 0.9995 = 0.0005 and when you convert it to percent you move the decimal over two spaces to the right). If we had that every month for 12 months it would be down 0.60%.

 

News stories might be saying it was down 0.1%. They may have rounded up from 0.05%.

 

It was 312.107 in Mar. 2024. Since 319.615/312.107 = 1.024, that means it was up 2.4% over the last 12 months. 

The non-seasonally adjusted CPI was 319.799 in Mar. and 312.332 in Mar. 2024. That was up 2.40%. So pretty close to the seasonally adjusted CPI. This is still above the Fed's target of 2.0% (although they prefer to use the Personal Consumption Expenditures Price Index which was 2.5% higher in Feb. 2025 than Feb. 2024).

 

For more information, see Inflation rate eases to 2.4% in March, lower than expected; core at 4-year low by Jeff Cox of CNBC. Excerpts:

"Consumer price inflation eased more than expected in March as President Donald Trump prepared to launch tariffs against U.S. trading partners, the Bureau of Labor Statistics reported Thursday.

The consumer price index, a broad measure of goods and services costs across the U.S. economy, fell a seasonally adjusted 0.1% in March, putting the 12-month inflation rate at 2.4%, down from 2.8% in February.

Excluding food and energy, so-called core inflation ran at a 2.8% annual rate, having increased 0.1% for the month. That was the lowest rate for core inflation since March 2021."

The article also discusses what types of products are going up in price and what is going down. There is a graph of the monthly year-over-year percent change in prices and core prices going back almost 4 years.

 

Other related links:

 

Consumer Price Index for All Urban Consumers: All Items Less Food and Energy in U.S. City Average (CPILFESL) This is also from from FRED (Federal Reserve Economic Data), compiled by the Research Division at the Federal Reserve Bank of St. Louis. It has the seasonally adjusted core CPI.

 

Consumer Price Index Data from 1913 to 2023

 

Personal Consumption Expenditures Price Index 

 

The Bureau of Labor Statistics makes seasonal adjustments. See Consumer Price Index Summary.

 

The table below has the annual inflation rate since 1914 in the columns labeled CPI %Ch. or CPI percentage change. It is from Consumer Price Index Data from 1913 to 2023 and is not seasonally adjusted. It is also the December to December change in the CPI. That site also looks at how the 12 month average for the CPI changed from one year to the next.

 

Year	CPI %Ch.		Year	CPI %Ch.		Year	CPI %Ch.		Year	CPI %Ch.
1914	1.0		1944	2.3		1974	12.3		2004	3.3
1915	2.0		1945	2.2		1975	6.9		2005	3.4
1916	12.6		1946	18.1		1976	4.9		2006	2.5
1917	18.1		1947	8.8		1977	6.7		2007	4.1
1918	20.4		1948	3.0		1978	9.0		2008	0.1
1919	14.5		1949	-2.1		1979	13.3		2009	2.7
1920	2.6		1950	5.9		1980	12.5		2010	1.5
1921	-10.8		1951	6.0		1981	8.9		2011	3.0
1922	-2.3		1952	0.8		1982	3.8		2012	1.7
1923	2.4		1953	0.7		1983	3.8		2013	1.5
1924	0.0		1954	-0.7		1984	3.9		2014	0.8
1925	3.5		1955	0.4		1985	3.8		2015	0.7
1926	-1.1		1956	3.0		1986	1.1		2016	2.1
1927	-2.3		1957	2.9		1987	4.4		2017	2.1
1928	-1.2		1958	1.8		1988	4.4		2018	1.9
1929	0.6		1959	1.7		1989	4.6		2019	2.3
1930	-6.4		1960	1.4		1990	6.1		2020	1.4
1931	-9.3		1961	0.7		1991	3.1		2021	7.0
1932	-10.3		1962	1.3		1992	2.9		2022	6.5
1933	0.8		1963	1.6		1993	2.7		2023	3.4
1934	1.5		1964	1.0		1994	2.7		2024	2.9
1935	3.0		1965	1.9		1995	2.5
1936	1.4		1966	3.5		1996	3.3
1937	2.9		1967	3.0		1997	1.7
1938	-2.8		1968	4.7		1998	1.6
1939	0.0		1969	6.2		1999	2.7
1940	0.7		1970	5.6		2000	3.4
1941	9.9		1971	3.3		2001	1.6
1942	9.0		1972	3.4		2002	2.4
1943	3.0		1973	8.7		2003	1.9