The 55+ single-family housing market index (55+HMI) dropped five points to 66 in the first quarter of 2018, according to the National Association of Home Builders (NAHB) (Figure 1). The decline comes after an all-time index high of 71 in the fourth quarter of 2017.
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 single-family 55+ HMI, present sales fell nine points to 70, expected sales for the next six months rose seven points to 80 and traffic of prospective buyers remained unchanged at 51.
Meanwhile, the 55+ HMI for multifamily condominiums jumped 10 points to 64 in the first quarter of 2018, the highest reading since the inception of the index in 2008 (Figure 2). Among its components, present sales rose eight points to 67, expected sales for the next six months increased 10 points to 70 and traffic of prospective buyers jumped 15 points to 55.
In addition to the 55+ HMIs, supply and demand measures for the 55+ multifamily rental market are produced. Three of the four components declined in the first quarter of 2018: present production declined three points to 59, expected future production fell four points to 57 and present demand for existing units decreased three points to 68. At the same time, future expected demand edged up one point to 68.
The decline in the single-family 55+ HMI is in line with the slight softening seen in other measures of single-family construction, which is likely due to adverse weather in the early months of 2018. However, going forward continued growth in the 55+ housing market is expected.