Confidence in the mature market building sector reflects a bleak landscape according to the third quarter results from the National Association of Home Builders’ 55+ Housing Market Index.
Almost all categories surveyed declined from the levels reported in the third quarter of 2009.
“While we have anecdotal information that some local 55+ markets are beginning to rebound, the third-quarter data show that national conditions for this sector have not yet turned the corner,” said NAHB’s Chief Economist, David Crowe. “Real improvement won’t happen until we have better employment numbers, and consumers who are more confident of keeping their jobs. Those consumers will buy the homes of the 55+ age cohort, so that the mature buyers will be able to move to more appropriate housing.”
The 55+ single-family HMI measures builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for the 55+ single-family market. A number greater than 50 indicates that more builders view conditions as good than poor.
In the third quarter of 2010, the index came in at 15, a five-point drop from the third quarter of the previous year. Present sales dropped four points, to 15. Expected sales (six months into the future) dropped six points, to 24. And traffic of prospective buyers fell seven points, to 11.
The lone relatively bright spot remains multifamily rentals. While present production is quite low, and not expected to grow significantly in the next six months (both show index levels in the low teens), present demand came in at 28, while expected demand is at 32. Those demand levels have been consistently in the high 20s and low thirties for the most recent four quarters.1These statistics indicate that more respondents see some strength in rental demand compared to the number who see any growth in production of new rental apartments to support that demand.
To view the full report, see here.