Builder confidence in the 55+ single-family housing market reported record growth during the first quarter of 2013, according to the National Association of Home Builders (NAHB).
The 55+ single-family housing market increased 19 points on a year-over-year basis to 46—the highest reading NAHB’s Housing Market Index (HMI) has seen since 2008.
The increase also marks the sixth consecutive quarter of year-over-year improvements in the 55+ sector.
“We are seeing an increase in consumer demand for homes and communities that are designed to address the specific needs of the mature homebuyer,” said Robert Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group.
The 55+ HMI is broken down into single-family homes and multifamily condominiums, measuring builder sentiment toward current market trends.
These trends include whether current sales, prospective buyer traffic and anticipated six-month sales for the market are good, fair or poor. An index reading below 50 indicates that more builders view conditions as poor than good.
All of the components of the 55+ single-family HMI showed significant growth from a year ago.
Present sales climbed 19 points to a reading of 46. Expected sales for the next six months increased 21 points to 53 and buyer traffic rose to 41, up 15 points from its year-ago level.
The 55+ multifamily condo HMI also posted a gain of 23 points to 38, also the highest first quarter reading since the index’s inception in 2008.
Present sales in this segment rose 23 points to 37, expected sales climbed 23 points to 43 and traffic of prospective buyers rose 23 points to a reading of 38.
“The strong year over year increase in confidence reported by builders for the 55+ market is consistent with year over year increases in other segments of the home building industry,” said NAHB Chief Economist David Crowe.
Demand for new 55+ housing has improved, he says, due to a reduced inventory of homes on the market and low interest rates.
On the other hand, builders’ ability to respond to this demand has been hindered by a shortage of construction labor as well as rising prices for building materials.
Written by Jason Oliva