Builder confidence is up in the single-family 55+ housing market, according to the latest 55+ Housing Market Index (HMI) from the National Association of Homebuilder (NAHB) The Index score rose to 66 in Q4 2018, up six points from the previous quarter.
“Overall, builders and developers in the 55+ housing market are reporting strong demand across the country,” said Chuck Ellison, Chairman of NAHB’s 55+ Housing Industry Council and VP-Land of Miller & Smith in McLean, Virginia. “However, builders need to continue to manage rising construction costs to keep homes in 55+ communities at affordable price points.”
All three components of the index, including present sales, expected sales, and prospective buyer traffic increased in Q4. Present sales rose six points to 72, expected sales for the next six months increased five points to 70 and traffic of prospective buyers jumped 10 points to 53.
The 55+ HMI measures two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each segment of the 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).
NAHB also notes increases in the multifamily 55+ condo market, with a three-point gain to 47. The index component for present sales for condos increased three points to 51, expected sales for the next six months fell four points to 49 and traffic of prospective buyers rose seven points to 38. In the 55+ multifamily rental market, two out of four components saw increases. According to the NAHB, present production increased six points to 60 and present demand for existing units rose four points to 67, while future expected production and future expected demand both fell two points to 54 and 62, respectively.
“Like the broader housing market, the 55+ HMI is benefitting from the recent decline in mortgage rates,” said NAHB Chief Economist Robert Dietz. “Favorable demographics and solid homeowner wealth should continue to support demand for new 55+ housing.”
The full 55+ HMI tables can be found here.