Eye On Housing
Builder confidence in the single-family 55+ housing market remained high in the fourth quarter of 2020, with the 55+ single-family housing market index (55+HMI) inching down one point to 82 (from an all-time high of 83 in the third quarter) (Figure 1).
The National Association of Home Builders’ (NAHB) produces two 55+ HMIs measuring distinct segments of the 55+ housing market: single-family homes and multifamily condominiums. Each 55+ HMI measures builder sentiment based on a survey that asks if current sales, anticipated six-month sales, and prospective buyer traffic for that market are good, fair or poor (high, average or low for traffic).
Two of the three index components of the 55+ single-family HMI decreased in the fourth quarter: present sales dropped one point to 87, expected sales for the next six months fell seven points to 83 while traffic of prospective buyers remained unchanged at 69.
The 55+ multifamily condo HMI fell four points to 63 in the fourth quarter (Figure 2). All three index components decreased: present sales fell four points to 66, expected sales for the next six months decreased three points to 64 and traffic of prospective buyers dropped six points to 57.
NAHB also produces four indices measuring supply and demand in the 55+ multifamily rental markets. All four components fell in the fourth quarter: present production decreased six points to 56, expected future production dropped 16 points to 45, present demand for existing units fell 13 points to 63 and future expected demand decreased six points to 65.
Overall, the 55+ housing market ended 2020 on a strong note, despite the COVID-19 pandemic. However, it is important to note that 55+ builders are still facing supply-side challenges, such as high material costs, and labor and lot shortages, making it difficult to meet the strong market demand.
For the full 55+ HMI tables, please visit nahb.org/55hmi.
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