Builder confidence in the single-family 55+ housing market sank 30 points to 38 in the first quarter of 2020, according to the National Association of Home Builders’ 55+ Housing Market Index (55+HMI) (Figure 1). This is the lowest reading since the fourth quarter of 2012.
The 55+HMI survey produces two indices, one measuring the 55+ single-family market and another for the 55+ multifamily condominium market. Each segment of the 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 three components of the 55+ single-family HMI, present sales fell 25 points to 48, expected sales for the next six months dropped 41 points to 34 and traffic of prospective buyers fell 33 points to 18.
The 55+ multifamily condo HMI fell 29 points to 29—also the lowest reading since the fourth quarter of 2012 (Figure 2). All three index components posted decreases from the previous quarter: Present sales fell 24 points to 36, expected sales for the next six months dropped 34 points to 27 and traffic of prospective buyers tumbled 39 points to 14.
In addition to the 55+HMIs, NAHB produces four indices measuring supply and demand in the 55+ multifamily rental market. All indices posted declines in the first quarter of 2020: present production dropped 18 points to 47, future expected production fell 24 points to 42, present demand decreased 32 points to 50 and future expected demand dropped 34 points to 49.
Like the broader housing market, the 55+ housing market has taken a significant hit due to the effects of the pandemic. NAHB expects further fallout from the virus in the short-term, but is forecasting the housing market to stabilize later this year and help lead the economy back to more solid footing.
For the full 55+ HMI tables, please visit nahb.org/55hmi.