According to the National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI), U.S. builder confidence in the single-family 55+ housing market remains strong in the fourth quarter of 2015 with a reading of 61, up one point from the previous quarter. This is the seventh consecutive quarter with a reading above 50.
"Builders and developers for the 55+ housing sector continue to report increased optimism in the market," said Jim Chapman, chairman of NAHB's 55+ Housing Industry Council and president of Jim Chapman Homes LLC in Atlanta. "We are seeing steady consumer demand for homes and communities that are designed to address the specific needs of the mature homebuyer."
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 above 50 indicates that more builders view conditions as good than poor.
One of the three index components of the 55+ single-family HMI posted an increase from the previous quarter: traffic of prospective buyers increased six points to 52. Present sales held steady at 65 while expected sales for the next six months decreased four points to 63.
The 55+ multifamily condo HMI dropped eight points to 42, falling back to a range typical of the past year and a half. All three components decreased as well: present sales fell 10 points to 44, expected sales for the next six months fell 10 points to 46 and traffic of prospective buyers edged down three points to 37.
Three of the four indices tracking production and demand of 55+ multifamily rentals posted gains in the fourth quarter. Present production and expected future production both rose one point to 56 and 61, respectively, and future demand increased three points to 71, while current demand for existing units fell four points to 66.
"This quarter's 55+ HMI is in line with our forecast for the overall housing market, which shows a gradual, steady recovery," said NAHB Chief Economist David Crowe. "In addition, the 55+ housing market is benefitting from growing home equity on the balance sheets of 55+ households, an improving economic outlook, historically low mortgage rates and a growing population as baby boomers age."