The National Association of Home Builder’s single-family 55+ Housing Market Index (HMI) increased one point to 57 in the second quarter of 2016 (Figure 1). This is the ninth consecutive quarter with a reading above 50. An index number above 50 indicates that more builders view conditions as good than poor.
Figure 1: 55+ Housing Market Index: Single-family, Seasonally Adjusted
There are two separate 55+ HMIs, one that measures conditions in the single-family market, and one that tracks activity in the multifamily condominium market. Each 55+ HMI is 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 sub-components of the single-family 55+ HMI, traffic of prospective buyers increased four points to 42, present sales held steady at 61, while expected sales for the next six months dropped two points to 69.
The 55+ multifamily condo HMI dipped one point to 47 (Figure 2). Among its sub-components, expected sales for the next six months rose three points to 54, while present sales remained even at 49 and traffic of prospective buyers fell seven points to 38.
Figure 2: 55+ Housing Market Index: Multifamily Condo, Seasonally Adjusted
Activity in the 55+ multifamily rental market is also tracked. Present production for this market segment fell nine points to 51 from a record-high reading in the previous quarter. On the other hand, expected future production rose three points to 56. Meanwhile, current and future demand for existing units both dipped one point each to 68 and 67, respectively.
Index results reflect gradual, steady growth in the 55+ housing market. The market is benefiting from continued improvements in the overall housing market, a solid labor market, and historically low mortgage rates.