Builder confidence for 55+ housing market ends 2011 on an upswing, though still weakened by seniors' concerns over low appraisals, high foreclosure rate, tighter mortgage lending criteria: NAHB
February 7, 2012
– Builder confidence in the 55+ housing market for single-family homes rose four points to 18 compared to the same period a year ago, according to the latest National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI) released today.
“We are seeing increased optimism from builders in the 55+ housing segment,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. “However, the market still remains weak as many people in the mature-market sector are hesitant to buy. They are concerned about selling their existing home at a fair price, due to low appraisals, an abundance of foreclosures and tighter mortgage lending criteria.”
The 55+ single-family HMI measures builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for that market. A number greater than 50 indicates that more builders view conditions as good than poor. All index components increased from a year ago: present sales rose four points to 17, expected sales for the next six months increased two points to 26 and traffic of prospective buyers rose five points to 15.
The 55+ multifamily condo HMI also showed improvement, with an index level up six points to 14. Present sales increased five points to 12, expected sales for the next six months rose three points to 17 and traffic of prospective buyers increased five points to 15.
The 55+ multifamily rentals demonstrated a significant increase across all components: Present production doubled to 34 points, expected future production increased 12 points to 35, current demand for existing units jumped 14 points to 42 and expected future demand increased 12 points to 44.
“As with the overall single-family housing market, we are seeing gradual, but steady, improvement in the 55+ market segment,” said NAHB Chief Economist David Crowe. “A level of 18 in the 55+ HMI is the highest fourth quarter reading since inception of the index in 2008, but still a long way from a healthy housing market. Also, as with the overall multifamily rental housing sector, the 55+ rental market is showing continued strength. All of the index subcomponents are at or above their highs since index inception in 2009.”