The 55+ Single-Family Housing Market Index (55+ HMI) jumped 12 points to reach a record high of 71 in the fourth quarter of 2017, according to the National Association of Home Builders (Figure 1). The fourth quarter also marks the 15th consecutive quarter in which the index has been above 50, the break-even point at which more respondents view conditions as good than poor.
There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominiums. 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).
Among the components of the 55+ single-family HMI, present sales posted a record high, increasing 14 points to 79, while expected sales for the next six months jumped 10 points to 73 and traffic of prospective buyers rose seven points to 51 in the fourth quarter.
The 55+ multifamily condo HMI rose three points to 54 in the fourth quarter (Figure 2). The index component for present sales increased four points to 59, expected sales for the next six months climbed five points to 60 and traffic of prospective buyers remained even at 40.
In addition to the 55+ HMIs, supply and demand measures for the 55+ multifamily rental market are produced. The indices measuring current and expected future production increased three points to 62 and four points to 61, respectively, in the fourth quarter. Meanwhile, the indices measuring present and expected future demand fell four points to 71 and nine points to 67, respectively.
The fourth quarter 55+HMI readings reflect a strong 55+ housing market, driven by favorable demographics and rising homeowner wealth. The readings are consistent with other indices measuring the housing market, such as the NAHB/Wells Fargo HMI, which also increased considerably at the end of 2017.
For the full 55+ HMI tables, please visit nahb.org/55hmi.