Single-Family 55+HMI Rises to Highest 1st Quarter Reading Since 2008

May 8, 2014

Builder confidence in the single-family 55+ housing market for the first quarter of 2014 is up year over year, according to the National Association of Home Builders’ (NAHB) latest 55+ Housing Market Index (HMI).

Compared to the first quarter of 2013, the single-family index increased 4 points to a level of 50, which is the highest first-quarter reading since the inception of the index in 2008 and the 10th consecutive quarter of year over year improvements.

There are many factors contributing to the positive signs in the 55+ housing market, including 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 the current 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.

Two of the components of the 55+ single-family HMI posted increases from a year ago: present sales rose six points to 52 and expected sales for the next six months climbed nine points to 62. Meanwhile, traffic of prospective buyers held steady at a reading of 41.

The 55+ multifamily condo HMI increased one point to 39, which is the highest first-quarter reading since the inception of the index. Two of the 55+ multifamily condo HMI components showed increases compared to a year ago: present sales increased four points to 41 and expected sales for the next six months rose five points to 48. Traffic of prospective buyers, however, decreased six points to 32.

Three of the four 55+ multifamily rental indices showed slight declines in the first quarter. Present production dipped one point to 42, expected future production decreased three points to 45 and current demand for existing units dropped one point to 55. Future demand showed an increase of one point to 59.

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Builder Confidence in the 55+ Housing Market Ends Fourth Quarter on a Record High

February 4, 2014

Builder confidence in the 55+ housing market for the fourth quarter of 2013 is up sharply, according to the National Association of Home Builders’ (NAHB) latest 55+ Housing Market Index (HMI).

All segments of the market—single-family homes, condominiums and multifamily rental—registered strong increases compared to the same quarter a year ago. The single-family index increased 20 points to a level of 48, which is the highest fourth-quarter reading since the inception of the index in 2008 and the ninth consecutive quarter of year over year improvements.

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 significant growth from a year ago: present sales climbed 26 points to 53, expected sales for the next six months rose 24 points to 62 and traffic of prospective buyers increased 9 points to 33.

The 55+ multifamily condo HMI posted a gain of 16 points to 35, which is the highest fourth-quarter reading since the inception of the index. All 55+ multifamily condo HMI components increased compared to a year ago.  Present sales increased 20 points to 37, expected sales for the next six months increased 15 points to 40 and traffic of prospective buyers increased 9 points to 30.

The 55+ multifamily rental indices also showed strong gains in the third quarter.  Present production increased 12 points to 43, expected future production rose 12 points to 46, current demand for existing units increased 16 points to 54 and future demand increased 16 points to 55.

The 20 point year-over-year increase in 55+ HMI for single-family homes matches earlier gains in the NAHB/Wells Fargo HMI for the overall single-family market and surpasses the more recent gains in the other housing segments.


Builder Confidence in the 55+ Housing Market Continues to Improve

November 7, 2013

Builder confidence in the 55+ housing market showed continued improvement in the third quarter of 2013 compared to the same period a year ago, according to the National Association of Home Builders’ latest 55+ Housing Market Index (HMI).

All segments of the market, single-family homes, condominiums and multifamily rentals, registered strong increases.  The single-family index increased 14 points to a level of 50, which is the highest third-quarter number since the inception of the index in 2008 and the eighth consecutive quarter of year over year improvements.

55+MHI_3q13

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 considerable growth from a year ago: present sales climbed 16 points to 52, expected sales for the next six months rose 11 points to 53 and traffic of prospective buyers increased 10 points to 43.

The 55+ multifamily condo HMI posted a gain of 14 points to 37, which is the highest third-quarter reading since the inception of the index. All 55+ multifamily condo HMI components increased compared to a year ago as present sales increased 15 points to 37, expected sales for the next six months climbed 11 points to 40 and traffic of prospective buyers rose 13 points to 35.

The 55+ multifamily rental indices also showed strong gains in the third quarter as present production increased 17 points to 48, expected future production rose 15 points to 50, current demand for existing units climbed 18 points to 60 and future demand increased 16 points to 60.

The positive year over year increase in confidence by builders for the 55+ market is tracking along with other segments of the home building industry. The 55+ market is improving in part because consumers are more likely to be able to sell their current homes, which allows them to buy a new home or move into an apartment that suits their specific needs.


Confidence in the 55+ Housing Market Shows Strong Growth

May 10, 2013

In the first quarter of 2013, the National Association of Home Builders’ 55+ single-family Housing Market Index increased 19 points on a year over year basis to 46, which is the highest first-quarter number recorded since the inception of the index in 2008 and sixth consecutive quarter of year over year improvements.

The index is up on increases in consumer demand for homes and communities that are designed to address the specific needs of mature homebuyers. 

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 significant growth from a year ago: present sales climbed 19 points to 46, expected sales for the next six months increased 21 points to 53 and traffic of prospective buyers rose 15 points to 41.

 The 55+ multifamily condo HMI posted a substantial gain of 23 points to 38, which is the highest first-quarter reading since the inception of the index. All 55+ multifamily condo HMI components increased compared to a year ago as present sales rose 23 points to 37, expected sales for the next six months climbed 23 points to 43 and traffic of prospective buyers rose 23 points to 38.

The 55+ multifamily rental indices also showed strong gains in the first quarter as present production increased 12 points to 43, expected future production rose 13 points to 48, current demand for existing units climbed 14 points to 56 and future demand increased 13 points to 58.

The strong year over year increase in confidence reported by builders for the 55+ market is consistent with year over year increases in other segments of the home building industry. While demand for new 55+ housing has improved due to a reduced inventory of homes on the market and low interest rates, builders’ ability to respond to the demand is being limited by a shortage of labor with basic construction skills and rising prices for some building materials.


Confidence in New 55+ Home Sales Posts Another Year-Over-Year Gain

February 7, 2013

Builder confidence in the 55+ housing market improved the fourth quarter of 2012 compared to the same period a year ago, according to NAHB’s  latest 55+ Housing Market Indices (55+ HMIs).

There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominiums.  Each 55+ HMI is based on a survey that asks if market conditions are good, fair or poor. An index number below 50 indicates that more builders view conditions as poor than good.

Although both 55+ HMIs remain below 50, both have improved significantly from a year ago.  The single-family index increased 10 points to a level of 28, the fifth consecutive quarter of year over year improvements.  Although multifamily condos remain the weakest segment of the 55+ housing market, the 55+HMI for condos also showed a substantial year-over-year increase, of six points to 19.

55+HMI 12Q4Meanwhile, the 55+ multifamily rental indices, which had already recovered substantially in 2011, remained relatively stable in the fourth quarter, although there was a slight pullback due to uncertainty about the low-income housing tax credit—the financial driver behind a significant portion of apartments built for this segment of the market. Present production dropped three points to 31, expected future production dipped one point to 34, current demand for existing units dropped four points to 38 and expected future demand fell five points to 39.

Like the overall housing market, the 55+ segment of the market is undergoing a slow but steady recovery, but there are some obstacles to a continued and stronger recovery.  While problems with tight credit conditions for buyers and obtaining accurate appraisals are still lingering, new problems like spot shortages and rising costs for labor, materials and lots are beginning to emerge.

For more information about NAHB’s 55+ HMI survey see www.nahb.org/55HMI


Video: Economist Paul Emrath on Improvement for 55+ Market

November 13, 2012

Year over Year, Confidence in the 55+ Housing Market Continues to Improve

November 9, 2012

Once again, builder confidence in the 55+ housing market showed significant improvement, according to NAHB’s 55+ Housing Market Indices (55+ HMIs) for the third quarter of 2012.  The  55+ HMIs and their components are based on survey questions that ask builders if market conditions are good, fair, or poor (high/very high, about average, or low/very low for the questions on traffic).  The indices all lie on a scale of 0 to 100, where 50 is a break-even point that occurs when equal numbers of builders report good and bad conditions.

There are separate 55+ HMIs for three segments of the 55+ housing market: single-family homes, multifamily condominiums and rental apartments. In the third quarter, the 55+ HMI for single-family housing tripled year over year from a level of 12 to 36, which is the highest third-quarter reading since the inception of the index in 2008.  (Because the 55+ HMIs are not seasonally adjusted, they need to be compared year over year.)

Although multifamily condos remain the weakest part of the 55+ HMI, builder confidence improved there as well.  The 55+ HMI for condos had a significant increase of 13 points to 23, which is the highest third-quarter reading since the inception of the index in 2008.

Meanwhile, the 55+ multifamily rental indices, which already recovered substantially last year, showed continued but more modest increases in the third quarter.  For example, present production climbed six points to 31.

Like other segments of the housing market, the market for 55+ housing is improving steadily as conditions get better in some parts of the country.  Although all 55+ HMIs are improving, all still remain below the break-even point of 50, indicating that there are still many places where builders consider the market for 55+ housing to be only fair to poor.  So, at the national level, there is considerable room for further improvement, assuming that the housing recovery can expand into other parts of the country.

For more information about NAHB’s 55+ HMI survey see www.nahb.org/55HMI