The Next Bend in the Road
Life can be funny, and by “funny” we don’t necessarily mean comical. We mean that life can be difficult to explain or understand at times. Life’s road is riddled with unexpected twists and turns. We can be set in a comfortable pattern that we think will last forever, but when we stay that course, and the road unexpectedly twists this way or that, we need to find the better way forward or risk disappointment, sadness, or even calamity.
This truth does not apply just to individuals but also to businesses and specifically to home builders. At HOME of Texas, we have a sister company that has been building homes for fifty-three years. Over more than half a century that company has generally thrived but sometimes twists in the road presented challenges that required changed plans, innovative approaches, or simply patience. There were mortgage interest rates exceeding 18% in the eighties. In the nineties the dot.com bubble expanded then burst, causing a feast for builders and then famine. In the first decade of the new century money was easy to borrow. McMansions, like so many mushrooms, popped up in developments across the American landscape. But then came the crash of 2008 and the meltdown in the real estate market.
Just as the homebuilding industry was feeling “normal” again, the Covid pandemic hit, and the market dried up. When the pandemic eased and normalcy returned, builders faced delays, shortages, and price increases in their supply chains. Some builders did not make it through, while others adapted to the new normal and found a way.
Government money paid to people who had lost their jobs or their customers during the pandemic soothed some fears but also triggered another round of inflation. The market stalled. When people regained the mood to start building and buying, builders again faced supply chain problems, and good labor was hard to find at affordable prices. Those problems were mostly resolved, or at least improved, but then interest rates rose, and the market cooled down.
With the start of 2025, the homebuilding industry was poised to prosper. But as we write this, the stock market is tanking, economic uncertainty is gripping the world, and builders are preparing for yet another twist in the road, this one caused by the expected inflation, the possible higher interest rates, and whatever other problems might develop from a prolonged trade war. We don’t have a crystal ball, and maybe these issues will be resolved without affecting the homebuilding market. But even if these concerns disappear, at some time there will certainly be more obstacles, curves, and detours on the road ahead for America’s homebuilders. The question we should always be asking is, “What’s next?” so we can anticipate coming obstacles and react to them early if we want to beat the competition and continue to thrive.
We recently had the pleasure of attending a meeting conducted by John, a builder friend of ours, who talked about how his company is preparing for whatever the future brings. He broke his company’s business down into four parts: getting leads; getting contracts; building the house; and servicing the home and customer after the sale. John recognized the importance of the warranty and our warranty resolution staff in making that fourth part successful no matter what the future holds.
HOME of Texas has been directed by the same owner since 1992, and we and our affiliates have administered home warranties on over four million homes! We offer a wide variety of warranty options, from the standard ten-year warranty to our specialty warranties for remodeling projects, detached garages, and commercial construction. HOME’s warranty mirrors Texas’ ten-year statute of repose and transfers the major structural defect obligations from our builders to HOME’s insurer in the final eight years of the warranty. HOME’s warranty provides clear performance standards that help create realistic expectations in your homeowners and a road map to resolve even the stickiest customer complaints.
At HOME of Texas, every guarantee our warranties make is backed by Western Pacific Mutual Insurance Company, RRG. Western Pacific has an A- rating from A. M. Best and only insures home warranty and similar new home construction risks, like builders’ general liability, which can be offered through the RWC Insurance Advantage program to HOME members. No other warranty company has an insurer with this kind of strength solely dedicated to covering builders and their homes.
Life is funny, you know, and life’s road can be twisted and bumpy. And we are never sure of what challenge is coming next. You will be better able to navigate the road your company is on no matter how that road twists or turns if you take HOME along for the ride and place a HOME of Texas warranty on every home you build.
Have a great summer!
