Builder confidence in the single-family 55+ housing market dropped four points to 68 in the fourth quarter of 2019, according to the National Association of Home Builders (NAHB) (Figure 1). The index is still well above its breakeven point of 50, indicating that more builders view conditions as good than poor. The fourth-quarter index is also consistent with the gradual upward trend the index has shown since 2013 and indicates that the market is still on solid footing.
The 55+ HMI measures two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each segment 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).
For the three index components of the 55+ single-family HMI, present sales fell five points to 73, expected sales for the next six months dropped two points to 75 and traffic of prospective buyers fell four points to 51.
The 55+ multifamily condo HMI rose five points to 58 in the fourth quarter (Figure 2). All three index components posted increases from the previous quarter: Present sales rose four points to 60, expected sales for the next six months went up five points to 61 and traffic of prospective buyers increased six points to 53.
In addition to the single-family and multifamily 55+ HMIs, NAHB produces indices that track activity in the 55+ multifamily rental markets. All four indices rose in the fourth quarter: present production increased eight points to 65, future expected production jumped 11 points to 66, present demand increased 10 points to 82—a record high—and future expected demand rose nine points to 83—also a record high.
The strong performance of the 55+ indices for the multifamily market is in line with the surge in multifamily starts that occurred at the end of 2019.
For the full 55+ HMI tables, please visit nahb.org/55hmi.