Builder confidence in the 55+ housing market for single-family homes showed strong continued improvement in the second quarter of 2013 compared with the same period a year ago, according to the National Association of Home Builders' (NAHB) latest 55+ Housing Market Index (HMI). The index increased 24 points to a level of 53, which is the highest second-quarter number since the inception of the index in 2008 and the seventh consecutive quarter of year-over-year improvements.
"Builders and developers for the 55+ housing sector are feeling optimistic as they are seeing more consumers return to the marketplace," said Robert Karen, chairman of NAHB's 50+ Housing Council and managing member of the Symphony Development Group. "With existing home prices rising, consumers are able to sell their current homes and make the move toward either purchasing a home or renting an apartment that is designed to more specifically suit their lifestyle."
There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each 55+ 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.
All of the components of the 55+ single-family HMI showed major growth from a year ago: present sales climbed 24 points to 54, expected sales for the next six months increased 25 points to 60, and traffic of prospective buyers rose 26 points to 48.
The 55+ multifamily condo HMI posted a substantial gain of 24 points to 43, which is the highest second-quarter reading since the inception of the index. All 55+ multifamily condo HMI components increased compared with a year ago as present sales rose 26 points to 44, expected sales for the next six months climbed 26 points to 46, and traffic of prospective buyers rose 19 points to 38.
The 55+ multifamily rental indices also showed strong gains in the second quarter as present production increased 19 points to 50, expected future production rose 20 points to 52, current demand for existing units climbed 20 points to 62, and future demand increased 21 points to 63.
"The 55+ HMI for single-family homes almost doubled from a year ago," said NAHB chief economist David Crowe. "Sentiment in other segments of the 55+ market housing was strong as well. This is consistent with the increase in builder confidence we've seen in other NAHB surveys recently. At this point, the main challenge for builders in many parts of the country is finding enough build-able lots in desirable locations and workers with the necessary skill set to respond to the increased demand."