Builder confidence in the 55+ single-family housing market remains in positive territory with the 55+ single-family housing market index (55+ HMI) increasing one point to 67 in the second quarter, according to the National Association of Home Builders (NAHB) (Figure 1).
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 increased three points to 73, sales expected in the next six months dropped three points to 77 and traffic of prospective buyers fell four points to 47.
Meanwhile, the 55+ condo HMI dropped seven points to 57 (Figure 2). Nevertheless, this quarter’s reading is the second highest since the inception of the index in 2008. All three 55+ condo HMI components decreased in the second quarter: present sales fell six points to 61, sales expected in the next six months dropped seven points to 63 and traffic of perspective buyers declined 11 points to 44.
In addition to the for-sale market, NAHB measures builder sentiment in the 55+ rental market. In the second quarter all four components tracking supply and demand in the 55+ rental market increased: present production rose six points to 65, production expected in the next six months jumped 11 points to 68, present demand for existing units increased four points to 72 and demand expected in the next six months rose seven points to 75.
Consumer demand for homes in 55+ communities remains strong. However, builders need to manage ongoing supply-side challenges, such as increases in the cost of building materials like lumber, to continue building homes at competitive price points.
For the full 55+ HMI tables, please visit nahb.org/55hmi.