Builders in the 55+ housing market are more confident than they have ever been during the first quarter and they have reason to be, according to the National Association of Home Builders’ (NAHB) latest 55+ Housing Market Index (HMI).
When compared to the first quarter of 2013, the single-family HMI increased 4 points to a level of 50, which NAHB notes is the highest first quarter reading since the inception of the index in 2008. The first quarter reading is also the 10th consecutive quarter of year-over-year improvements for the index.
There are many factors contributed to the positive signs in the 55+ housing market, said Steve Bomberger, chairman of NAHB’s 50+ Housing Council and president of Benchmark Builders Inc. in Wilmington, Delaware.
“Rising house prices and low interest rates are helping baby boomers sell their existing homes at a favorable price and in turn, purchase a new home more suited to their current lifestyles,” Bomberger stated.
When judging builder sentiment for the HMI, an index reading below 50 indicates that builders view conditions as poor than good.
Two of the components of the 55+ single-family HMI posted increases from a year ago, as present sales rose six points to 52 and expected sales for the next six months climbed nine points to a reading of 62.
Though confidence is at record high for the first wuarter, there are still headwinds preventing a stronger recovery.
“The 55+ segment of the housing market is stronger now than it was a year ago,” stated NAHB Chief Economist David Crowe. “But there are still some headwinds hampering a stronger recovery, as builders in many markets are facing tight credit conditions and a lack of lots and labor.”
Written by Jason Oliva