Builder confidence in the single-family 55+ housing market took a 12-point dive in the first quarter of with a reading of 55, according to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI)
. However, the NAHB stressed that this was the 12th consecutive quarter with a reading above 50, which signifies builders still view conditions as good rather than poor.
“We saw an unusually high 55+ single-family HMI in the 4th quarter of 2016 due to a post-election surge in optimism,” said NAHB Chief Economist Robert Dietz. “As this wears off, confidence is returning to a more sustainable level. Although builders are struggling with shortages of labor and lots, as well as higher lumber prices, market conditions on balance remain favorable, and we expect solid growth in the 55+ housing sector.”
Still, it was difficult to overlook the pessimism in the first quarter. All three components of the 55+ single-family HMI posted decreases from the previous quarter: present sales dropped 12 points to 62, expected sales for the next six months fell by seven points to 68 and traffic of prospective buyers sank 15 points to 34. The 55+ multifamily condo HMI remained even at 46, with the three components showing mixed results: present sales remained even at 50, expected sales for the next six months fell five points to 47 and traffic of prospective buyers rose two points to 37. But all four indices tracking production and demand of 55+ multifamily rentals took a downturn: present production dipped four points to 50, expected future production dropped 16 points to 44, current demand for existing units decreased seven points to 64 and expected future production fell 14 points to 62.