Builder confidence in the single-family 55+ housing market was up again on a year-over-year basis in the second quarter, according to NAHB’s 55+ Housing Market Index (HMI). Compared to the second quarter of 2013, the 55+HMI for new single-family housing increased three points to 56–the highest second-quarter reading since the inception of the index in 2008 and the 11th consecutive quarter of year over year gains.
One of the factors contributing to the positive outlook for new single-family 55+ housing is the slow but steady increase in existing home sales in the last three months, as the market for new 55+ homes is typically driven by consumers being able to sell their existing homes at a favorable price in order to buy in a 55+ community.
NAHB produces several 55+HMIs to cover various aspects of the 55+ market. The indices are based on a survey of builders. Their answers are converted to index on a scale of 0 to 100, where 50 represents a key break-even point. An index above 50 means that the number of builders reporting good conditions in a segment of the 55+ market outnumber those reporting that conditions are poor.
In the second quarter, the 55+ HMI for multifamily condos dipped five points to 38. That, however, is the second highest reading since the inception of the 55+ condo index, and far above where it had been prior to 2013.
Meanwhile, the indices tracking production and demand of 55+ rental apartments moved in opposite directions in the second quarter. Present production of 55+ rentals improved three points year-over-year to 53, while expected future production increased one point to 53. Demand for existing rental apartments, which recently has been the strongest segment of the 55+ housing market, declined slightly year over year. Current demand dropped three points to 59, while future demand fell two points to 61.
For more information about NAHB’s 55+ HMI, including the complete history of each index and its components, see www.nahb.org/55HMI