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Kitchen Table Economics: Thinking about home prices

Thinking about home prices

By Beth H. Watson

I live in Mineral Wells, Texas, a quickly redeveloping city about an hour away from the DFW Metroplex. 

With mortgage rates near all-time lows and lots of attractive new projects and amenities in our area, residential real estate is booming. 

In the last 18 months, I have sold a house and bought another. By buying in May 2020 and selling in November that year, it seems we timed things just right!

Popular real estate websites estimate that the value of my new home is up 32 percent since purchase and 12 percent in the last month. The old house has appreciated about 18 percent since we sold it after hardly any growth in value the previous 13 years.

Friends who have owned their homes for many years–not just here, but in other hot areas across the country–are amazed at what houses around them are selling for, especially compared to what they paid back in the day, or even just a few years ago.

The increased chatter you’re hearing about rising property values is natural, probably because houses are a big chunk of many Americans' net worth. For those with an average level of assets–a very broad range from $50,000 to $499,999–home equity represents about 50 percent of their total net worth, according to the Census Bureau.1

The increased “value” of our homes makes us feel wealthier. It’s exciting!

Those who think about it will probably settle on an ambivalent relationship with their own home equity, though.

Here at Corner Post Financial Planning, we have been analyzing people’s financials for many years. In most financial strategies, home value is a non-factor unless clients want to sell. Most don’t.  So their equity is locked up, and their primary residence is just an expense. 

Put bluntly: It’s interesting that you paid $75,000 for your house 20 years ago, and one around the corner just sold for $325,000. Your taxes will go up, but it really doesn’t matter for you personally, unless you’re going to move.

When a client’s home becomes relevant in a financial plan, the property is usually a problem because a) the mortgage is too high or b) the house is too expensive to maintain.

Cash flow from rentals does figure positively into financial plans, and techniques to unlock home equity are sometimes appropriate for sophisticated investors. 2 But what counts in most cases is that your home has affordable upkeep and is paid for at retirement.

Should you live in a home you love? Absolutely! My family’s recent move from a busy corner to a quiet lot with mature trees and a big backyard has improved our quality of life far more than I imagined it would.

Remodel the kitchen and bathroom or replace the floors because you want to, not because, as some home improvement vendors suggest, it is an “investment in your biggest asset.”  


Next in the “Kitchen Table Economics” series: Thinking about stuff

Previously: Thoughts on Rising Food Prices

Also see: What if something happens? 6 strategies for the unknown

Beth Henary Watson is a Certified Financial PlannerTM at Corner Post Financial Planning.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Neither Corner Post Financial Planning nor LPL Financial provides legal or tax advice.


1) Wealth, Asset Ownership, & Debt of Households Detailed Tables: 2019,

2) “Should I Pay Off My Mortgage?” by David John Marotta,, April 6, 2021.