Builder confidence in the single-family 55+ housing market reached an all-time high, jumping 18 points to 83 in the third quarter of 2020, according to the National Association of Home Builders (NAHB) (Figure 1).
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).
A growing number of prospective homebuyers want to experience communities either virtually, by self-led appointments, or private appointments. Traffic remains strong, but the type of traffic is evolving through growing availability of digital options.
All three index components of the 55+ single-family HMI posted all-time highs in the third quarter: present sales increased 16 points to 88, expected sales for the next six months rose 20 points to 90 and traffic of prospective buyers jumped 23 points to 69.
The 55+ multifamily condo HMI increased 20 points to 67 in the third quarter (Figure 2). All three index components posted increases: present sales rose 20 points to 70, expected sales for the next six months increased 15 points to 67 and traffic of prospective buyers jumped 24 points to 63. The 55+ multifamily condo HMI, and its present sales and traffic of prospective buyers components reached all-time highs in the third quarter .
NAHB also produces four indices tracking supply and demand in the 55+ multifamily rental markets. All four indices rose in the third quarter: present production increased six points to 62, expected future production rose seven points to 61, present demand for existing units climbed 15 points to 76 and future expected demand rose seven points to 71.
Low interest rates and the importance of home are helping to fuel demand in the 55+ housing market. On the supply-side, builders are experiencing shortages of key construction materials, which continues to negatively impact affordability. Recent declines in the price of lumber has offered some relief, however.
For the full 55+ HMI tables, please visit nahb.org/55hmi.