Eye On Housing
The NAHB single-family 55+ Housing Market Index (55+ HMI) rose six points to 72 in the first quarter of 2019, indicating that builder confidence in the 55+ housing market continues to strengthen (Figure 1). The index reading is the highest since the inception of the index in 2008.
The 55+ HMI measures two segments of the 55+ housing market: single-family homes and multifamily condominiums. 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).
All three components of the single-family 55+ HMI increased in the first quarter: present sales rose four points to 76, expected sales for the next six months climbed seven points to 77, and traffic of prospective buyers surged eight points to 61.
The 55+ multifamily condo HMI jumped 10 points to 57 in the first quarter of 2019, returning to its level seen in the second quarter of 2018. (Figure 2). Among its components, present sales increased seven points to 58, expected sales for the next six months climbed 13 points to 62 and traffic of prospective buyers jumped 14 points to 52.
NAHB also tracks builder confidence in the 55+ multifamily rental markets with supply and demand measures. Future indicators for the multifamily rental market posted increases in the first quarter of 2019: future expected production increased four points to 58 and future expected demand inched up one point to 63. Meanwhile, current indicators dipped slightly: present production dropped two points to 58 and present demand for existing units fell six points to 61.
Favorable demographics and lower mortgage rates have helped to increase demand in the 55+ housing market. However, it is important to note that supply-side challenges, such as regulatory, land acquisition, and construction costs, continue to temper growth.
For the full 55+ HMI tables, please visit nahb.org/55hmi.
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