The National Association of Home Builders’ 55+ single-family housing market index rose 6 points to 66 in the fourth quarter of 2018, returning to levels seen in the first half of the year (Figure 1). A reading at or above 50 indicates that more builders view conditions as good than poor.
The 55+ HMI consists of two indices: one for the single-family market and another for the condominium market. Each index measures builder sentiment based on a survey that asks if current sales, anticipated six-month sales, and prospective buyer traffic for the market are good, fair, or poor (high, average, or low for traffic).
All three index components of the 55+ single-family HMI posted increases from the previous quarter: present sales rose six points to 72, expected sales for the next six months increased five points to 70 and traffic of prospective buyers jumped 10 points to 53.
The 55+ multifamily condo HMI posted a three point gain to 47 in the fourth quarter of 2018 (Figure 2). The component measuring present sales increased three points to 51 and traffic of prospective buyers rose seven points to 38. At the same time, expected sales for the next six months fell four points to 49.
In addition to measuring sentiment in the for-sale market, NAHB produces indices measuring supply and demand in the 55+ multifamily rental market. Two of the four components of the 55+ multifamily rental market went up from the third quarter: present production increased six points to 60 and present demand for existing units rose four points to 67. Meanwhile, future expected production and future expected demand both fell two points to 54 and 62, respectively.
The 55+ market ended 2018 on a strong note. In the fourth quarter, it received a boost from a drop in mortgage rates and continues to benefit from favorable demographics, and solid household wealth.
For the full 55+ HMI tables, please visit nahb.org/55hmi.