Confidence is still high in the 55+ housing market, new figures show.
Builder confidence in the single-family 55+ housing market was 71 in Quarter 2, 2019. This is down just one point on the previous quarter due to softness in traffic of prospective buyers. However, that was a record high.
So says the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI).
Why confidence is still high in the 55+ housing market
Karen Schroeder, chair of NAHB’s 55+ Housing Industry Council explains, “Although the single-family HMI fell slightly, builder sentiment still remains strong for this segment of the market.
“In fact, the reading of 71 is just one point off from the all-time high of 72 from the previous quarter. We expect the 55+ housing market to continue on a positive path moving forward.”
The 55+ HMI measures single-family homes and multifamily condominiums. It asks builders 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).
For the three index components of the 55+ single-family HMI, present sales remained even at 76. Expected sales for the next six months increased one point to 78. Traffic of prospective buyers fell five points to 56.
Sales expectations rise
The 55+ multifamily condo HMI rose two points to 59. Two of three index components posted increases from the previous quarter. Present sales and expected sales for the next six months increased three points to 61 and 65. Traffic of prospective buyers dropped two points to 50.
All four components of the 55+ multifamily rental market went up from the first quarter: Present production and future expected production both increased six points to 64, while present demand jumped 12 points to 73 and future expected demand rose 10 points to 73.
NAHB Chief Economist Robert Dietz concludes, “Demand for 55+ housing remains solid, as demonstrated in the surge for 55+ rental demand. Builder sentiment for the for-sale 55+ housing market also remains in positive territory, supported by low inventory of existing homes. However, it is being constrained by development costs and their impact on affordability.”