Builders: Demand for 55+ housing hits record high
WASHINGTON – Feb. 1, 2018 – Builder confidence in the single-family 55+ housing market hit at least a nine-year high in the fourth quarter of 2017– the highest reading since the National Association of Home Builders’ (NAHB) created the index in 2008.
The index rose to 71 in the last three months of 2017, up 12 points from the previous quarter, according to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI).
“Builders and developers in the 55+ housing market are reporting strong demand across the country,” says Chuck Ellison, chairman of NAHB’s 55+ Housing Industry Council. “However, regulations in some parts of the country can make it challenging to meet the demand.”
There are separate 55+ HMIs for two 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, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor.
All three index components of the 55+ single-family HMI posted increases from the previous quarter: Present sales posted a record high, increasing 14 points to 79; expected sales for the next six months jumped 10 points to 73; and traffic of prospective buyers rose seven points to 51.
The 55+ multifamily condo HMI posted a gain of three points to 54. The index component for present sales increased four points to 59; expected sales for the next six months rose five points to 60; and traffic of prospective buyers remained even at 40.
Two of the four components of the 55+ multifamily rental market went up from the third quarter: present production increased three points to 62 and expected future production rose four points to 61. However, present demand for existing units fell four points to 71 and future expected demand dropped nine points to 67.
“The strong performance of the 55+ HMI at the end of 2017 is consistent with recent increases in broader measures of the housing market, including the NAHB/Wells Fargo HMI,” says NAHB Chief Economist Robert Dietz. “We expect continued growth in the market for new 55+ housing in 2018 due to favorable demographics, rising homeowner wealth and the current tight supply of existing homes on the market.”
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