The single-family 55+ Housing Market Index (55+ HMI) jumped eight points to 67 in the fourth quarter of 2016, according to the National Association of Home Builders (NAHB). This is the highest reading since the inception of the index in 2008 (Figure 1).
The NAHB produces two 55+ HMIs: one for the single-family market and another for multifamily condominiums. Each index is based on a survey asking builders about present sales, expected sales for the next six months, and prospective buyer traffic. A reading at or above 50 indicates that more builders view conditions as good than poor.
All three subcomponents of the single-family 55+ HMI posted increases from the previous quarter: present sales and expected sales for the next six months posted index-highs, increasing 11 points to 74 and 10 points to 75, respectively, while traffic of prospective buyers rose two points to 49.
In the fourth quarter, the multifamily condo 55+ HMI dropped two points to 46 (Figure 2). The index component for present sales fell one point to 50, expected sales for the next six months increased one point to 52 and traffic of prospective buyers dropped three points to 35.
The NAHB also tracks activity in the 55+ multifamily rental market. All four indices tracking production and demand in this market segment increased in the fourth quarter. Present production increased six points to 54 and expected future production rose 11 points to 60, while both current demand for existing units and future demand posted index-highs, jumping 12 points to 71 and 17 points to 76, respectively.