Builder confidence in single-family 55+ housing remains strong thanks to an aging Boomer population and a post-election confidence boost for builders, according to new data from the National Association of Home Builders' (NAHB). 55+ Housing Market Index.
The NAHB’s 55+ Housing Market ended the fourth quarter of 2016 at 67 points — eight points higher than Q3 and the index’s highest reading since its inception in 2008.
“The significant increase in the index reading is attributed partly to a post-election boost, as many builders and developers are encouraged by President Trump’s commitment to cut burdensome regulations that negatively impact small businesses,” said Dennis Cunningham, chairman of NAHB's 55+ Housing Industry Council. “Builders and developers in this market segment are also encouraged by the fact that for the next 15 years, 10,000 baby boomers will be turning 65 every day. The consistent pressure of this age group wanting to downsize from a large home, shifting to other regions of the country or just simply looking for a newer home or community also play a key role in the index movement.”
Sales for single-family 55+ homes increased by 11 points from the previous quarter to 74, while expected sales for the next six months increased by 10 points to 75; the index of prospective buyers increased by two points to 49.
Meanwhile, the other component of the 55+ housing market — multifamily condos — fell by two points to 46. The index for present condo sales fell by a point to 50; expected sales for the next six months went up by a point; traffic of prospective buyers fell by three points to 35.
“The strong performance of the 55+ HMI at the end of 2016 is consistent with recent increases in broader measures of the housing market, including new home sales and the NAHB/Wells Fargo HMI,” said NAHB Chief Economist Robert Dietz. “We expect continued growth in the 55+ market in 2017, although builders in many places will still face challenges in finding adequate supplies of inputs like labor and lots.”
Morning Briefing: Builder confidence holds ahead of Trump
Morning Briefing: Seattle, Portland price rises modest compared to these cities