Builders saw a record quarter for interest in and development of 55+ housing, with the pace expected to continue in the coming months and years, according to research released this week by the National Association of Home Builders.
The second quarter findings on the 55+ market indicate the market is growing both for multifamily and single family home building.
“Builders and developers for the 55+ housing sector are feeling optimistic as they are seeing more consumers return to the marketplace,” said Robert Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group. “With existing home prices rising, consumers are able to sell their current homes and make the move toward either purchasing a home or renting an apartment that is designed to more specifically suit their lifestyle.”
In the quarter ended June 30, builders reported strong, continued improvement in the sector with an increase of 24 points on the association’s index—the highest second-quarter measure since the inception of the scale in 2008. The improvement marks the seventh consecutive quarter of year-over-year improvement in 55+ housing.
Both single family and multifamily indexes for the 55+ development sector rose, with expected sales increasing 25 points for single family development.
The 55+ multifamily outlook was also notably strong, according to NAHB’s analysis, having rose 24 points to a 43 level on the scale; the highest second quarter reading since the inception of the index. Expected sales for multifamily housing among the older population rose 26 points for the next six months.
“The 55+ HMI for single-family homes almost doubled from a year ago,” said NAHB Chief Economist David Crowe. “Sentiment in other segments of the 55+ market housing was strong as well. This is consistent with the increase in builder confidence we’ve seen in other NAHB surveys recently. At this point, the main challenge for builders in many parts of the country is finding enough buildable lots in desirable locations and workers with the necessary skill set to respond to the increased demand.”
The 55+ multifamily rental indices also showed a substantial uptick in the second quarter with present production increasing 19 points to 50, expected future production rising 20 points to 52, current demand for existing units rising 20 points to 62 and future demand showing an uptick of 21 points to 63.
Written by Elizabeth Ecker