Builder Confidence in the 55+ Market Improves in the Second Quarter

Builder Confidence in the 55+ Market Improves in the Second Quarter

by Paul Emrath — Eye on Housing

According to NAHB’s latest 55+ Housing Market Index (HMI) survey, builder confidence in the market for new 55+ single-family homes increased significantly in the second quarter of 2012.  Compared to the same period a year ago, the 55+HMI for new single-family homes more than doubled from 13 to 29.  (Because the survey results are not yet seasonally adjusted, numbers should only be compared year-over-year.)

The 55+ single-family HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic).   An index number below 50 indicates that more builders view conditions as poor than good.

The 55+ single-family HMI is a weighted averages of current sales, traffic and expected sales.   Although the index components remain below the break-even point of 50, all have increased considerably from a year ago.  Present sales more than doubled (from 12 to 30), while expected sales for the next six months increased 17 points to 35 and traffic of prospective buyers rose nine points to 22.

Meanwhile, the 55+ multifamily rental indices recovered substantially last year, and are now holding steady: present production climbed three points to 31, expected future production increased three points to 32, current demand for existing units dropped one point to 42 and expected future demand decreased two points to 42.

Buyers are likely returning to the 55+ housing market as home prices begin to improve, helping to unlock some of the pent-up demand from 55+ consumers who have been sitting on the sidelines until they are able to sell their current homes at a more favorable price.

For more information about NAHB’s 55+ HMI survey see

www.nahb.org/55HMI

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