Obsidian Market Update 3/25/2022
Welcome to spring! We hope your season is off to a beautiful start and that all the bulbs you planted last fall are starting to sprout.
This week, we’ll look at the Fed’s decision to raise interest rates and how that will affect people. Then, we’ll share some of the most value-adding home renovation projects.
The Fed made the decision to raise interest rates for the first time since 2018 to try to curb inflation, which is disproportionately harming lower income families.
First, what the Fed is doing is raising the federal funds rate by a quarter of a percent. This will signal interest rates across the economy, with the idea that it will eventually filter to consumers. Interest rates on mortgages, student loans, credit cards, and more will begin to rise a bit–but don’t worry, you probably don’t need to rush out to make any changes. If in doubt, what should you do? Call us! We’ll talk you through your individual situation.
The goal is to curb investments by both consumers and businesses and encourage savings, which is what the economy needs right now to balance out. This one rate hike probably isn’t going to solve the problem, and the Fed indicated that it could raise rates as many as six more times this year. As always, we’ll keep you posted.
Springtime can be home remodeling season for lots of people, and if you’re remodeling with an eye to increasing your home’s resale value (as opposed to just doing something because you like it) then check out these tips about which projects are worth your investment. Here are a few examples:
- Add living space. Finishing a basement is a great way to do this, and has a potential return on investment of 75%. With enough basement square footage, it can even bump your home into the next price bracket. (But be wary of converting a garage, as most home buyers want garage space.)
- Enhance curb appeal. Buyers will pay more for a home with great curb appeal, and the return on investment can be over 300%. This can involve landscaping, adding a steel door for energy efficiency, and even just adding a pretty mailbox with nice numbers.
- Enhance outdoor living space. This is often a high priority for buyers, and can be accomplished with a deck or patio, a fire pit, a beautiful front porch, or an outdoor kitchen.
Thinking about doing a home remodel? We’ll get in touch to go over the finances with you.
That’s it for us this week! We’ll be right back here next Friday.
How We Help:
This week we met with a client who lives in the DC metro area and is looking to relocate to a warmer climate. They are trying to decide if they should rent, lease, have two homes, or some other arrangement. We walked them through the costs involved in all of these scenarios. One piece of advice we sometimes give is to rent in an area you’re considering moving to before you buy there to be sure you really like it, and don’t just wind up moving back. If you’re thinking of taking a step like this, get in touch and we’ll talk through it with you.
Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Securities are offered through Triad Advisors, member FINRA/SIPC. Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.