Builder confidence in the 55+ housing market for single-family homes had a significant increase in the first quarter of 2012 compared to the same period a year ago, according to the latest National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI). The HMI increased 10 points to 27, and although 27 is relatively low for an index that lies on a scale of 0 to 100, it is nevertheless the highest reading since the inception of the index in 2008.
"We continue to see increased optimism from builders and developers in the 55+ housing segment," said NAHB 50+ Housing Council Chairman W. Don Whyte. "We are servicing the largest growing group of buyers that we have ever seen in this age category, and it is a population that is dramatically different from what it was only a few years ago. This creates an opportunity for builders and developers in this market to create communities that address the specific needs of the 55+ consumer."
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. All index components remain well below 50, but increased considerably from a year ago, each reaching an all-time high: Present sales rose 12 points to 27, expected sales for the next six months increased eight points to 32 and traffic of prospective buyers rose nine points to 26.
The 55+ multifamily condo HMI remains the weakest of the 55+ housing market indices, but also recorded an all-time high at 15, up seven points from a year ago. All index components showed an increase compared to a year ago: Present sales rose five points to 14, expected sales for the next six months increased seven points to 20 and traffic of prospective buyers jumped nine points to 15.
The 55+ multifamily rentals continue to lead the way in the overall 55+ housing market. Present production climbed 11 points to 31, expected future production increased eight points to 35, current demand for existing units rose three points to 42 and expected future demand increased one point to 45.
"Like the overall single-family housing market, the 55+ housing segment is facing a slow but steady recovery," said NAHB Chief Economist David Crowe. "Consumers are starting to see the resale market show some improvement, which allows them to start thinking about moving into 55+ housing."
ABOUT NAHB: The National Association of Home Builders is a Washington-based trade association representing more than 140,000 members involved in remodeling, home building, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for this year.