Builders say the market for 55+ housing has never been better. Ever.
Builder confidence in the sector for those ages 55 and over rose “sharply” in the fourth quarter, according to the National Association of Home Builders, to its highest-ever level on the association’s Housing Market Index. All segments including single-family, condos and multifamily rentals increased year over year, with the index rising 20 points to 48 on the scale—the highest reading since its inception in 2008.
The quarter also marked the ninth consecutive quarter of year-over-year increases, with builders anticipating the momentum to continue.
“We are seeing continued improvement in the 55+ housing market because consumers have gained confidence in the economy and are able to sell their current homes and move into a new home or an apartment that fits the lifestyle they desire,” said Robert Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group. “We expect this optimism from builders and developers to carry on into 2014.”
The index considers current sales, prospective buyer traffic and anticipated six-month sales for both multifamily and single-family housing. In the fourth quarter reading for single family homes, all factors improved: present sales climbed 26 points to 53, expected sales for the next six months rose 24 points to 62 and traffic of prospective buyers increased 9 points to 33.
For the multifamily market, similarly, all components improved; with present sales up 20 points to 37, expected sales for the next six months up 15 points to 40 and traffic of prospective buyers up 9 points to 30.
This market segment has dragged in its recovery following the housing crash, but is now gaining force as the 55+ market sells their primary homes to move into new homes, downsize or retire, NAHB notes.
“The 55+ segment of the housing market contains more discretionary purchases so as expected it has taken longer for that segment to join the housing recovery,” said NAHB Chief Economist David Crowe. “The 20 point year-over-year increase in 55+ HMI for single-family homes matches earlier gains in the NAHB/Wells Fargo HMI for the overall single-family market and surpasses the more recent gains in the other housing segments.”
Written by Elizabeth Ecker