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The Two Housing Markets: New home sales climbed this summer, particularly in July. These sales continue to outpace the existing home market. Part of the story is how surging mortgage rates have gridlocked the market for already-built homes. New home sales were the fastest pace of growth for new homes since February 2022.

Most existing homeowners benefit from the far lower mortgage rates they locked in when they first bought (or refinanced). That, along with the current prices of homes, means they’re not thrilled with the idea of trying to move now. Moving would mean selling and getting a new mortgage, just as rates are the highest they’ve been in decades. So, existing homeowners are staying put, which means far fewer homes on the market. The impact is that first-time home buyers now make up roughly 50% of all purchases, according to Zillow. That number was 37% just two years ago. The bottom line is that while new home sales are growing much faster than existing homes, the latter makes up over 80% of the market. So even if some buyers move into newly built homes, there’s not enough to ease what is quickly becoming a housing affordability crisis.

Borrowing for a Downpayment: Recent data from Redfin revealed that 38% of recent homebuyers under the age of 30 used either a cash gift from a family member or an inheritance to afford their down payment. As mentioned above, first-time homeownership has become increasingly expensive, which has shut the door to homeownership for young people without family money. As a result, many young homeowners can be labeled “nepo-homebuyers,” meaning they received family money to purchase a home. This phenomenon contributes to intergenerational wealth inequality and limits economic opportunities for young people and their families.


The income needed to purchase a starter home has steadily increased for over a decade and jumped 13% in the last year alone. As a result, many young people turn to family for help when getting onto the first rung of the housing ladder.

If you are considering helping your child or grandchild purchase a house, please talk with your advisor. We have seen effective and ineffective ways to help.

Boat Buying Surge: We read an article this week titled “Americans Sound Miserable, but Are Buying Lots of Boats.” The data shows that despite complaints about inflation and the economy, personal spending on pleasure boats continues to hover near a remarkable high.

Why does this matter? Well, you would only buy a boat if you’re reasonably confident the economic wind is at your back. So, it is a positive indicator that Americans—despite what they tell pollsters—are feeling pretty good. It’s a bit of a reality check on what polling says is the predominant American mood of the moment: diffident and dissatisfied, verging on despondent. The boat-buying narrative—which began during Covid—is another strike against the dominant “looming recession” narrative.

It’s important to note that it’s not the yacht-owning-one-percenters responsible for this boat-buying surge. According to the National Marine Manufacturers Association, it’s the regular folks fishing, water-skiing, sailing, and jet-skiing.

Business Briefing

  • IRS Freezes Pandemic Pay: The Internal Revenue Service said Thursday it would freeze a pandemic-era employer tax benefit while it figures out ways to prevent rampant fraud. The IRS has started over 250 criminal investigations involving fraudulent claims that allegedly cost the federal government nearly $3 billion. (The New York Times)
  • Rising Gas Prices and Inflation: Consumer prices rose slightly more than economists expected in August due to surging gasoline prices, the Labor Department reported Wednesday. The consumer price index increased by 0.6%, its most significant monthly jump since June 2022, or 3.7% year-on-year. Gas prices climbed 10.6%, accounting for over half of the overall increase. The core index, which excludes volatile fuel and food prices, increased just 0.3% for the month and 4.3% on an annual basis. (Reuters)
  • The Survey Says: U.S. consumers, whose continued spending has helped prevent a recession, might cut back in early 2024, resulting in the first drop in personal consumption since the start of the coronavirus pandemic, Bloomberg reported Sunday, citing its latest Markets Live Pulse survey. More than half of the survey’s 526 respondents said the reversal would hit in the first quarter of next year, while 21% said it would hit in the fourth quarter of this year. The cuts in personal consumption—the biggest driver of economic growth—come as higher borrowing costs and dwindling Covid-era savings force American families to tighten their budgets. (Bloomberg)

Adult Legos: Maybe all the money spent on Legos during childhood is actually worth it. Ongoing labor shortages and volatile markets in both steel and concrete are forcing creative options. A Florida construction firm is seeing fast adoption of its intuitively made building blocks that work like real-life Lego bricks. The interlocking blocks made of mineral composite reinforced with glass fiber can be quickly and quietly assembled into walls, floors, and even roofs, with a unique adhesive and rubber mallet being the only tools needed to get the job done.

Renco USA Released

In Palm Springs, a $21 million, 96-unit housing complex near West Palm Beach is being built by just 11 workers using this innovative Lego-like system. They’re rated to withstand wind speeds of 275 mph, and because of naturally occurring resin used in the injection molding of the blocks, they wick moisture away rather than absorbing it. They’re even insect repellent. A test section of blocks was put into a terrarium with a queen termite and 99 males. A month later, the block stood alone amid dead insects.

What do you think? Would you build a Lego house?