The National Association of Home Builders (NAHB) Housing Market Index for the 55+ age bracket, released in February, found the sector fell by several points in the fourth quarter, compared with the same period in 2009.
The index for single-family homes fell three points to 14, on the heels of annual declines in the previous two quarters of 2010.
“The normal course of purchasing a new home in anticipation of or upon entering retirement has been interrupted by the fall in baby boomers’ house values and reduction in their home equity,” said NAHB Chief Economist David Crowe. “Boomers are finding that the market for their current home remains soft and potential buyers cannot qualify for affordable mortgages. Even those with the ability to buy a new home are finding a limited selection, as builders cannot get loans to build homes.”
The index considers builder sentiment based on current sales, prospective buyer traffic and anticipated six-month single-family sales for the age group. In terms of those indicators, all three drooped in the year-over-year Q4 measure. With a reading above 50 indicating that more builders view conditions as good than poor, the present sales index fell from 17 to 13; expected sales dropped five points, to 24; and traffic of prospective buyers fell from 12 to 10 points.
Further, the multifamily condo housing market index also showed a decline, from 11 in the fourth quarter of 2009 to 8 in Q4 2010. Similar to the single-family findings, all three index components fell during the period.
For rental units, the outlook was slightly stronger, with expected production of rental units seeing a five-point increase, to 23. Additionally, demand for multifamily rental units rose two points.
View the full 55+ HMI tables.
Written by Elizabeth Ecker