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Quick Look at the Housing Market:  According to estimates recently released by the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family houses in February 2023 were at a seasonally adjusted annual rate of 640,000. This is 1.1 percent above the revised January rate. New home sales are close to pre-pandemic levels.

The other side of the housing market that we consider is home renovations. According to a Harvard report, total homeowners spending on do-it-yourself improvement projects grew 44% between 2019 and 2021 to a record $66 billion. The average renovation now takes 79 days on average, up 259% from 22 days in 2019. And, of course, general construction workers’ hourly wages and material costs have increased. The net effect is that remodeling is more expensive, and the timelines for completion are longer (either with DIY or hired).

Short-Term Interest Rates: Add to the current state of the housing market the fact that the Federal Reserve raised short-term rates by another quarter percentage point on Wednesday. While that decision has numerous effects, one is that homeowners will be more tempted to stay in their current home rather than move. This rate increase brings the benchmark federal funds rate to a range between 4.75% and 5%, the highest level since September 2007.

Planning for Our Next Generation: Advisor Luke Porter shares thoughts on long-term planning: “During a recent client meeting with a couple, we discussed their child, who was in their 20s and uncertain where to begin with their finances, so I scheduled a meeting with them.

In the meeting, we discussed their emergency reserve, goals for the future, and the importance of a budget. To keep things high-level at first, we went over the 50/30/20 rule for budgeting. The rule states that 50% of net income is for needs, 30% for wants, and 20% for savings. These spending goals may be difficult to achieve early on in your career, but the most important thing we are doing is establishing good habits to help us succeed in the long term.”

It is never too early to start focusing on your long-term planning and training yourself in healthy financial behaviors. Please invite us in to help educate your loved ones whenever we can be of service.

Speaking of the Next Generation: Delta Airlines caught a version of Bring Your Kid to Work Day. Delta captain and managing director Rich Kaynor recently flew from Los Angeles to Lihue, Hawaii, and then on to Seattle with first officer Cole Kaynor, his son. The father-son duo flew together for the first time on Cole’s one-year work anniversary with Delta, as well as his 30th birthday. Proud dad Rich took to the flight’s intercom to brag about his son.

Photo Courtesy of Delta Airlines