Most of the indices from NAHB’s 55+ HMI survey remained well in positive territory in the first quarter of 2015, although the 55+ HMI for single-family housing edged down by one point to 58. An index over 50 means more builders view the market as good than poor, and the single-family 55+ HMI has been well over 50 for four consecutive quarters now.
Although the 55+ single-family HMI edged down overall, two of its components posted increases: present sales increased one point to 64 and expected sales for the next six months rose three points to 67. The overall decline was driven by an 8 point drop to 40 in traffic of prospective buyers. Harsh weather, which hit some parts of the country at times during the first quarter, seems to have impacted traffic without hurting 55+ single-family sales or builders’ confidence in the market going forward.
There is a separate 55+ HMI for multifamily condominiums, which continue to be the weakest segment of the market. The 55+ HMI for multifamily condos dipped four points in the first quarter, to 38.
In contrast, three out of the four indices tracking production and demand of 55+ multifamily rentals posted increases. Present production jumped eight points to 58, expected future production increased one point to 52 and current demand for existing units rose three points to 68, while future demand dipped two points to 64.
The 8 point surge in the index for current 55+ apartment production was especially notable, as it follows several quarters of strength in the index gauging demand for existing 55+ rental apartments—which was well over 60 even before the three point increase in the first quarter.
It’s not surprising that production is responding to demand with a lag, given challenges in obtaining land and approval to build on it, as well as ongoing shortages of labor in key trades.
For the full 55+ HMI table, including the complete history of each index and all of its components, visit www.nahb.org/55hmi.