Builder Confidence on the Rise for 55+ Housing Market
Some great news has come out of the latest 55+ Housing Market Index from the National Association of Home Builders! All segments of the market, which include single-family homes, condominiums and multifamily rentals, registered strong increases compared to the same quarter a year ago. Additionally, the 55+ Housing Market Index (HMI) revealed that the single-family index increased 20 points to a level of 48, which is the highest fourth-quarter reading since the inception of the index in 2008 and represents the ninth consecutive quarter of year over year improvements.
“We are seeing continued improvement in the 55+ housing market because consumers have gained confidence in the economy and are able to sell their current homes and move into a new home or an apartment that fits the lifestyle they desire,” said Robert Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group. “We expect this optimism from builders and developers to carry on into 2014.”
The 55+ HMI measures market perceptions of builders across two main segments: single-family housing and multi-family condominiums. According to the National Association of Home Builders (NAHB), each 55+ HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor than good.
Compared to last year’s figured, all components of the HMI showed significant growth. Present sales gained 26 points, bringing the figure to 53. Expected sales for the next six months jumped 24 points to 62 and prospective buyer traffic rose 9 points to 30.
According to a recent press release from the NAHB, the 55+ multifamily rental indices also showed strong gains. Present production increased 12 points to 43, expected future production gained 12 points to 46, current demand for existing units increased 16 points to 54 and future demand rose 16 points to 55.
NAHB Chief Economist David Crowe noted that, while this particular market segment is doing great, the improvements took a while to materialize.
“The 55+ segment of the housing market contains more discretionary purchases so as expected it has taken longer for that segment to join the housing recovery,” said Crowe. “The 20 point year-over-year increase in 55+ HMI for single-family homes matches earlier gains in the NAHB/Wells Fargo HMI for the overall single-family market and surpasses the more recent gains in the other housing segments.”
You can view the full 55+ HMI tables by following this link: http://www.nahb.org/en/research/housing-economics/housing-indexes/55-plus-housing-market-index.aspx
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