The Official Online Weekly Newspaper of NAHB
Third-quarter results from the NAHB 55+ Housing Market Index found low levels of builder confidence in the mature-market sector, with almost all of its component indexes down from a year earlier.
"While we have anecdotal information that some local 55+ markets are beginning to rebound, the third-quarter data show that national conditions for this sector have not yet turned the corner," said David Crowe, NAHB’s chief economist.
"Real improvement won't happen until we have better employment numbers, and consumers who are more confident of keeping their jobs,” Crowe said. “Those consumers will buy the homes of the 55+ age cohort, so that the mature buyers will be able to move to more appropriate housing."
The 55+ single-family HMI measures builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for the 55+ single-family market on a scale of one to 100. A number greater than 50 indicates that more builders view conditions as good than poor.
The index was at 15 in this year’s second quarter, five points below its level for the same quarter of 2009. Present sales were down four points from a year earlier, at 15; expected sales (six months into the future) fell six points, to 24; and traffic of prospective buyers skidded seven points, to 11.
The 55+ multifamily condo HMI also showed continued weakness, with an index level of 10, down from the previous year's 13. All three index components — current sales, expected sales and buyer traffic — declined during this period.
Multifamily rentals remain the only relatively bright spot for active adult housing. While present production was quite low and not expected to grow significantly in the next six months — with index levels for both in the low teens — present demand registered 28 and expected demand was 32.
Demand levels have been consistently in the high 20s and low 30s for the most recent four quarters, suggesting an imbalance between demand and the actual amount of rental apartments that are being produced.
For the full 55+ HMI tables, go to www.nahb.org/55HMI.