Amidst the current barrage of sensational headlines from national media heralding the gloom and doom of the U. S. economy, homeownership remains at the top of the list as one of the most effective and time-tested forms of building wealth and equity among Americans.
Known for decades as the American Dream, owning a home today still represents
the strongest, largest leveraged investment and most substantial tax deduction available to most individuals. But in a much wider sense, the scope of homeownership in any community shapes its development by its subsequent need for schools, retail support and churches as well as city services and increased infrastructure.
Socially, homeownership creates neighborhood 'stakeholders', who tend to be more active in charities, civic government and community activities. On a more personal level, it is the roof over a family's head that provides a sense of security and continuity.
Mark Kettler, of Mark Kettler Homes and 2008 President of the Heart of Texas Builders Association, said that today's buyer's market and low interest rates make this the perfect time to capitalize on a home buying opportunity.
In Waco's housing market, area homebuilders are reacting accordingly to the current surplus inventory of homes for sale by concentrating their efforts on custom builds rather than spec homes. Buyers looking for a readily available new home in the area's subdivisions will find their choices steadily dwindling. New construction homes feature the latest in popular amenities, modern design, sophisticated technology and energy-
efficient systems.
As an investment on the national scale, homes have historically appreciated approximately 5-6 per cent annually. During the last big economic downturn of the early 1990's, the National Association of Home Builders (NAHB) reports that those purchasing a new home in 1991 at the national median price paid around $120,000: in 2007 that same number had risen to $246,900. When compared to other investments, such as stocks, a home is a relatively stable investment.
"For those who've been considering buying a new home now is the time," he said. "Sellers are competitive and it's unlikely that interest rates will go much lower. The very best value for a homebuyer is when both these factors combine in their favor. Once interest rates start going up again, even 1/2 a percentage point, the additional interest you'd pay on a 30-year fixed-rate mortgage would probably exceed what you'd expect to save by waiting for a lower purchase price."
Even those who must sell their home in order to relocate to the Waco area may come out ahead, due to the affordability of Waco's housing. According to the Texas Housing Affordability Index (HAI) for the first quarter 2007 (Real Estate Center at Texas A&M University), Waco ranked in the top third of the thirty Texas cities listed for affordable housing. In addition, HAI also noted that the median selling price of Waco housing was only 76% of the State average and 51% of the national average. In contrast, HAI showed median income rates in Waco during that time were in the 96 percentile of the state average and 85 percentile of the national average.
The Greater Waco area continues to attract new business and industry. Sarah A. Roberts, Sr. Vice President-Economic Development for the Waco Chamber of Commerce, confirmed that site selection inquiries are up slightly from this same period in 2007.
"Since 2005, our region has announced more than 30 new locations and expansions totaling 3,782 new jobs, $528 million in capital investment and 3.8 million square feet in absorption and new construction," she said.
"Greater Waco's diverse economy and stable population growth enable us to maintain a sustainable development pattern in the midst of economic challenges in other areas," she added. "We are not overly dependent on one industry. Waco's success is evident in the numbers. From January 2007 to January 2008, Waco added 2,472 new jobs (a 2.3% increase) and well-surpassed Texas' growth rate of 1.4% in new jobs during the same frame."
In January, the Real Estate Center at Texas A&M University released its report "Looming Boom: Texas Through 2030," which projects a population increase in Texas of 13.6 million people from 2005 through 2030. Ninety percent of these new residents are expected to settle in a geographical triangle between Denton, Houston and San Antonio.
The National Association of Home Builders (NAHB) expects that its industry will need to construct almost 18 million new homes in the U. S. over the next decade to keep up with the demands of anticipated new household formations. This projection also bodes well for future residential appreciation, economic development and consumer confidence.
Waco's local home building organization, The Heart of Texas Builders Association, was founded in 1956 and is located at 621 W. Hwy 6 near the Sanger Avenue overpass.
