Keith Grant – Memphis Flyer

A home is more than just a structure where people take up residency. Owning a home means freedom, financial independence, and security. For many, owning a home brings a feeling of success, knowledge that they’ve obtained their own bit of the American dream. And, as for a home — according to Dorothy as well as millions of homeowners — well, there’s no place quite like it.

The advantages of today’s new homes are without parallel. Breakthrough technology has brought safety and energy efficiency in homes to a new level, and for conveniences and amenities, it’s hard to beat a new home.

Technology Brings Safety to the Forefront

Today’s homes are safer, because new homes take advantage of breakthroughs in building science. For example, hardwired and interconnected smoke alarms bring a new level of fire safety to new homes. If one alarm goes off in the garage, they will all go off, giving your family ample time to get to safety. New fire-resistant construction materials such as better electrical wiring mean less chance of a dangerous electrical fire. Tempered glass, now found in many patio doors and windows, means less chance of an injury should one break.

New Homes: More Energy-Efficient Than Ever

It is easier than ever for home shoppers looking at a new home to get access to energy-efficient construction. Builders nationwide are embracing new green building techniques designed to help protect our environment while saving you money. They also have an ever-expanding array of products and materials to choose from that enables them to make a house more resource-efficient and water-thrifty. Many participate in programs like ENERGY STAR, promoting energy-efficient appliances, and WaterSense, promoting water efficiency. ENERGY STAR-rated windows keep heat in during the winter and out during hot summer months, saving you money on heating and cooling costs. High-tech insulation ensures consistent temperatures throughout a new home while using less energy.

As more and more consumers demand a “leaner” home, builders are responding by returning to age-old practices, like siting a home to take the best advantage of sunlight and shade. Recent innovations like solar shingles (not just solar roof panels), light-conserving windows, and insulation made from recycled materials are also changing the market.

New Homes Offer Home Buyers Their Choice of Lifestyles

Today’s new homes offer more of what buyers want. Because of increased demands for larger socializing spaces in the home, larger kitchens are becoming more common. New homes also feature more bathrooms and more storage space. Consumers are seeking greater ceiling heights, walk-in showers with multiple heads, three-car garages, and outdoor entertainment spaces with fireplaces and grills. And builders are responding with new homes that provide these features.

So why do Americans like new homes? The answer lies in choice. People want to be able to personalize their home with their own tile, flooring, and appliance choices. In a new home, the consumer can select virtually everything down to the knobs on their kitchen cabinets. It’s all part of the American dream. ■

Keith Grant is president of the Memphis Area Home Builders Association.

For many people, buying a first home is a rite of passage. It’s a foot firmly planted in independence and on the path to success, a true part of the American dream. But as many first-time buyers are coming to realize, it’s more than just the end-goal of a journey toward financial independence. Buying a home, particularly your first home, just makes good plain sense, now more than ever.

Potential first-time buyers may be intimidated by today’s changing housing market. Isn’t it just better to “play it safe” and keep renting in case home prices fall? If you buy now, will you be paying too much?

First, these are valid considerations. Even those who have bought and sold many homes ask similar questions. But the truth is that today’s economic environment makes it an excellent time to buy. Interest rates are low by historical standards, there are lots of choices, and sellers are offering incentives.

Perhaps, as a first-time buyer, you want to wait until prices drop lower. Actually, if you continue to wait, you may never be able to afford to get into the housing market. The truth is, even a small uptick in interest rates can wipe out any gains from falling prices.

Consider this example: If you decide to wait to purchase a home and the price were to drop $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up half a point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.

Interest rates currently stand at about 6.5 percent and are extremely favorable for buyers. In fact, they are hovering near 30-year lows. But waiting to time the market is a dangerous — and losing — game. Even those who follow the market for a living can’t figure out when interest rates will bottom out. If they could, they would all be multimillionaires. Because interest rates are near historic lows, it is much more likely that they will head higher in the future as opposed to moving even lower.

Now consider the current rental market. During the past few years, many rental units have been converted to condos, resulting in fewer rentals on the market. Less supply, higher prices. Each year, your rent can easily go up 5 to 10 percent. Where is the economic security in that? When you buy a home, you’re also locking in price stability, knowing that you will pay the same monthly payment for the life of your 30-year fixed-rate mortgage. Plus, renting doesn’t get you the investment or tax benefits of homeownership.

The best way to build household wealth is to own a home. Once you do, you are able to take advantage of generous tax deductions, and your equity begins to build. Your home will appreciate in value over the years, and eventually you can use those gains to sell your starter home and afford to move into a bigger house. Remember, it’s called a starter home for a reason. With so many homes on the market to choose from, your best strategy may be to scale back expectations for your dream home. After a few years, you will be able to leverage this investment and buy a larger house.

The truth is, buying your first home just makes good sense. Housing is always a smart investment, and it is by far the best way to use a small amount of money for a big return. Interest rates are historically low, and the selection of homes on the market is plentiful. Do your research and you’ll come to this conclusion: In today’s market, the real risk isn’t in buying a home, it’s sitting on the fence.

Keith Grant is president of the Memphis Area Home Builders Association.