Builder confidence in the single-family housing market for ages 55 and up rose one point in the Q3 2019, marking a return to its record-high reading of 72. This is according to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI) released Thursday, and is the highest reading since the inception of the index in 2008 according to the association.
The HMI measures two segments of the housing market for seniors: single-family homes along with multifamily condominiums. Each segment of the senior HMI measures the sentiment of builders based on survey responses. That survey asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor.
“The 55-plus market has been supported by strong demand as aging Baby Boomers continue to seek downsized homes, but with higher end features and amenities,” said Karen Schroeder, chair of NAHB’s 55-plus Housing Industry Council in a press release announcing the data. “While conditions remain positive, headwinds such as labor shortages and rising construction costs are still dampening the market a bit.”
Present sales for 55-plus homes in the HMI rose by two points to 78. However, one-point drops were exhibited in expected sales over the next six months (to 77) and traffic of prospective buyers (to 55). The multifamily condo HMI for the 55-plus demographic decreased by six points to 53, while all three index components declined from Q2 2019: present sales fell five points to 56, expected sales for the next six months dropped nine points to 56 and traffic of prospective buyers declined three points to 47.
Still, economic factors including interest rates and the general health of the job market seem to be having a positive effect on overall demand for housing in the demographic, according to Robert Dietz, chief economist for NAHB.
“Demand for 55+ single-family housing remains strong, mirroring the gains we have seen in the overall market, which has been largely supported by low interest rates and healthy job growth,” said Dietz in the press release. “Sentiment about the 55+ multifamily market declined somewhat this quarter, but on balance remains positive. A modest decline was not surprising, given the post-Great recession record number of apartments currently under construction.”
NAHB’s 55-plus Housing Market Indexes are based on a regular, quarterly survey of NAHB members involved in the housing market. It is primarily designed to monitor conditions in the single-family, multifamily condo and multifamily rental segments of the 55-plus housing market.
Find the 55-plus HMI tables at the NAHB website.