NAHB's 55+ Housing Market Index down three points to 14 in Q4 compared with Q4 2009, reflecting fall in baby boomers' house values, reduction in their home equity
February 11, 2011
(National Association of Home Builders)
– Home builder sentiment for the mature-market sector retreated in the last quarter of 2010 when compared to the same period a year earlier. The National Association of Home Builders' 55+ Housing Market Index for single-family homes dropped three points to 14 from a year ago following annual declines in the second and third quarters of 2010.
"The normal course of purchasing a new home in anticipation of or upon entering retirement has been interrupted by the fall in Baby Boomers' house values and reduction in their home equity," said NAHB Chief Economist David Crowe. "Boomers are finding that the market for their current home remains soft and potential buyers cannot qualify for affordable mortgages. Even those with the ability to buy a new home are finding a limited selection, as builders cannot get loans to build homes."
The 55+ single-family HMI measures builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for the 55+ single-family market. A number greater than 50 indicates that more builders view conditions as good than poor. Among the index components, present sales dropped four points, to 13. Expected sales (six months into the future) dropped five points, to 24. And traffic of prospective buyers fell two points, to 10.
The 55+ multifamily condo HMI also showed continued weakness, with an index level of 8, down from 11 at the end of 2009. All three index components – current sales, expected sales and buyer traffic – declined during this period.
While the present production index for multifamily rental units rose only one point, to 17, the index of expected production for those units in the next six months jumped five points, up to 23, indicating respondents see some strengthening in the months ahead for the construction of apartments. Current and expected demand for multifamily rental units each rose by 2 points, reaching 28 and 32, respectively.