There’s a classic example used in behavioral psychology: the marshmallow test. In this experiment, children were given a choice: eat one marshmallow now, or wait a little while and get two. The lesson? Those who could delay gratification tended to experience greater success later in life.

That same principle applies beautifully to homeownership.

If your ultimate goal is to one day have your home completely paid off, the question becomes: are you willing to make small sacrifices now so you can reap bigger rewards later? Or will you choose comfort and consumption today and carry the financial burden of a mortgage into your retirement years?

Making regular additional principal payments on your mortgage is one of the smartest forms of delayed gratification. It’s not glamorous. It means driving the same car a little longer, skipping that expensive vacation, or resisting the urge to upgrade your lifestyle with every raise. But those steady, disciplined extra payments�say $100 to $200 each month�can shorten your loan by years and save you tens of thousands of dollars in interest.

More importantly, it puts you on track to own your home outright.

Imagine reaching retirement without a house payment. Your monthly expenses drop dramatically, giving you more flexibility and freedom. You may not need as much in retirement savings. You could choose to work less, travel more, or simply breathe easier knowing that no one can take your home from you.

On the flip side, choosing not to delay gratification, maxing out your lifestyle, refinancing to take cash out, or simply making minimum payments, can mean carrying a mortgage into your 60s or 70s. When many people want to slow down and enjoy the fruits of their labor, they’re still stuck paying for yesterday’s choices.

The marshmallow test isn’t just about kids and candy. It’s about life and how we make financial decisions. A little patience now, a little extra toward your mortgage each month, can lead to a lifetime of reward.

So, ask yourself: will you wait for two marshmallows later? Or settle for just one now? The path to a paid-for home starts with the power of delayed gratification. Use our Equity Accelerator calculator to make projections to pay your home off sooner.

Through a 28-year lens, tax policies on home sales haven’t kept pace with rising home values. That’s putting homeowners in a bind and stifling real estate opportunities across the board.

Since 1997, the capital gains exclusion on the sale of a primary residence has remained unchanged at $250,000 for individuals and $500,000 for married couples. Back then, the average U.S. home cost about $145,000. Today, that same home sells for around $422,600, up a staggering 191%. But the tax break hasn’t budged, squeezing homeowners who have earned significant appreciation over decades.

Housing economists refer to this as the "Stay-Put Penalty" since tax-free profit has a capped limit, many homeowners are discouraged from selling, even after years of significant appreciation. Research shows that 34% of homeowners (about 29 million people) have already surpassed the $250,000 single-filer threshold, and over 10% have exceeded the $500,000 joint-filer cap according to a recent NAR study. That means the longer you stay, the more you’re likely to owe tax on more than the exclusion, penalizing success and freezing inventory.

In high-cost states like California and Massachusetts, this trend is even more extreme: by 2035, over 40% of homeowners in 20 states could be hit with capital gains taxes simply for having built wealth.

With long-term homeowners locked in place, there’s a ripple effect throughout the market. Inventory thins, competition heats up, and prices climb, locking out first-time buyers and families hoping to upgrade.

Meanwhile, a 2024 Gallup poll underscores real estate’s strength: Americans ranked property as the best long-term investment, ahead of stocks, gold, and bonds, for the 11th consecutive year. It’s a powerful signal: even with tax limits, Americans still trust real estate’s enduring value.

The National Association of REALTORS� is backing the bipartisan More Homes on the Market Act, aiming to:

• Double the exclusion to $500,000 for individuals and $1 million for married couples
• Index it to inflation
• Encourage more homeowners to sell without tax penalties

Homeownership should be a pathway to wealth, not a locked door. Letting equity accumulate only to tax it away runs counter to the American dream. Updating these tax rules would unlock much-needed housing stock, empower older homeowners, and open doors for younger families.

It’s time for a tax code that rewards, not restricts, the promise of homeownership.

For more information, download our Homeowners Tax Guide and IRS Publication #523.