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Builder confidence in the single-family 55+ housing market for the third quarter is up year over year, according to the National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI) released today. Compared to the third quarter of 2013, the single-family index jumped nine points to a level of 59, which is the highest third-quarter reading since the inception of the index in 2008 and the 12th consecutive quarter of year over year improvements.
"Demand for 55+ housing has never been higher, and this quarter's index clearly demonstrates that," said Steve Bomberger, chairman of NAHB's 50+ Housing Council and president of Benchmark Builders Inc. in Wilmington, Del. "Consumers in this market are looking for a home that caters towards their specific needs, and 55+ builders and developers are able to create homes and communities that address these needs."
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 components of the 55+ single-family HMI posted increases from a year ago: present sales jumped 13 points to 65, expected sales for the next six months climbed 10 points to 63 and traffic of prospective buyers rose three points to 46.
The 55+ multifamily condo HMI posted a four-point gain to a reading of 41, which is also the highest third-quarter reading since the inception of the index. All components of the index increased for the third quarter: present sales rose five points to 42, expected sales for the next six months climbed three points to 43 and traffic of prospective buyers increased three points to 38.
The indices tracking production and demand of 55+ multifamily rentals also posted positive results in the third quarter. Present production rose four points to 52, expected future production increased two points to 52, current demand for existing units climbed four points to 64 and future demand increased five points to 65.
"The consistent rise in home equity has contributed to the strong gains in the 55+ housing market," said NAHB Chief Economist David Crowe. "Many consumers who had been sidelined due to the inability to sell their current homes at an acceptable price are now in a position where they can sell their homes, enabling them to rent or buy in a 55+ community."