Builder Confidence in 55+ Markets Up 27 Points
Washington, DC, July 31, 2020–Builder confidence in the single-family 55+ housing markets bounced back in the second quarter, jumping 27 points to 65, according to the National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI) released this week.
The 55+ HMI measures two segments of the 55+ housing markets: 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).
"Low supply of existing homes and low interest rates are key factors in helping the 55+ housing markets bounce back to where it was at the beginning of the year," says Harry Miller III, chairman of NAHB's 55+ Housing Industry Council and president of Regal Builders LLC in Dover, Delaware.
The three index components of the 55+ single-family HMI all posted gains in the second quarter: present sales increased 24 points to 72, expected sales for the next six months surged 36 points to 70 and traffic of prospective buyers rose 28 points to 46.
The 55+ multifamily condo HMI increased 18 points to 47. All three index components also posted increases from the previous quarter: present sales rose 14 points to 50, expected sales for the next six months increased 25 points to 52 and traffic of prospective buyers rose 25 points to 39.
All four components of the 55+ multifamily rental market went up from the first quarter: present production increased nine points to 56, expected future production rose 12 points to 54, present demand for existing units increased 11 points to 61 and future expected demand posted a 15-point gain to 64.
“Like the broader housing market, we are seeing the 55+ housing market return to pre-pandemic levels,” says NAHB Chief Economist Robert Dietz. “However, challenges such as rising lumber costs and availability of skilled labor will limit a more robust recovery."