Builders Report Slow Gains in 55+ Housing Market
Led by improvements in single-family home sales, builders registered slightly more confidence over current conditions in the market for 55+ housing during this year’s second quarter, according to the latest NAHB 55+ Housing Market Index. However, their expectations for the next six months declined.
The 55+ HMI is based on survey responses from builders who are building single-family homes, multifamily condos and multifamily rentals for the 55+ housing market, and it includes three components: present sales, expectations for the next six months and (with the exception of multifamily rentals) the traffic of prospective buyers. The index is scaled from 0 to 100, with any number over 50 indicating that there are more positive than negative responses.
The index for single-family homes for the 55+ market climbed to 15 in the second quarter, up one point from the first quarter. Multifamily condos registered 12 on the index.
“The survey shows that builders are still cautious,” said David Crowe, NAHB chief economist. “They may be seeing a few green shoots as some sales pick up, but builders understand that the consumer remains uncertain and awaits clearer signs of a housing and economic recovery.”
Based on builder responses for the April-to-June period, expectations for single-family home sales in the 55+ market fell from 26 to 23. Future expectations for condo sales were measured at 17.
Despite improved sales in the second quarter, builders indicated a decline in traffic of prospective single-family buyers — from 14 to 12. Condo sales traffic registered 10.
“Most 55+ home buyers are current owners with considerable equity in their homes, but they are waiting to sell their home before committing to another purchase,” said Crowe. “Historically low interest rates and good bargains in the new-and existing home markets will eventually bring these folks back into the market,” he said.
“Buying power has been scaled back by the financial crisis, but the demand for age-friendly housing is still there,” Crowe said, “and it will be a big factor in housing for at least the next decade.”
For more information, e-mail Ann Marie Moriarty at NAHB, or call her at 800-368-5242 x8350.