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With buyers facing low appraisals, an abundance of foreclosures and tighter mortgage lending criteria, builder confidence in the 55+ housing market for single-family homes fell three points to 12, compared to the same period a year ago, according to the latest NAHB 55+ Housing Market Index (HMI) released last week.
“The current state of the economy continues to affect buyers in the 55+ housing market,” said NAHB Chairman Bob Nielsen. “While potential buyers exist, they are hesitant to commit to buying a new home as they are concerned about selling their existing home at a fair price."
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. A number greater than 50 indicates that more builders view conditions as good than poor.
Among these index components, present sales dropped four points, to 11, during the third quarter; expected sales dropped nine points, to 15, and traffic of prospective buyers rose two points, to 13.
While staying even compared to a year earlier, the 55+ multifamily condo HMI still remains weak, with an index level of 10. Present sales dropped one point, to 9, while expected sales dropped four points, to 10. Traffic of prospective buyers rose two points, to 11.
Alternatively, 55+ multifamily rentals remain the strongest segment of the 55+ housing market, with the index measuring present demand rising 12 points to 40, and the one measuring future demand up 10 points to 42. Current and future production indexes for 55+ multifamily rental units also jumped in the third quarter from a year ago — up 11 points to 25, and 10 points to 26, respectively.
“Multifamily rental units continue to be the bright spot in the 55+ housing market,” said NAHB Chief Economist David Crowe. “However, with demand currently running ahead of production, as it has been for several quarters now, the risk of a shortage of rental units in select markets in the future looms larger as builders continue to have trouble obtaining credit to finance new construction.”
“Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available through NAHB BuilderBooks, will help determine the right design, home features and amenities to attract boomer home buyers in your market.
Author Margaret A. Wylde guides readers through the latest survey results on this important consumer group and explains what their responses mean for today’s and tomorrow’s home building industry.
To view or purchase this publication online, click here, or call 800-223-2665.