Builder confidence in 55+ market remains positive despite drop

A precipitous drop in sentiment may signal builder confidence returning to a more sustainable level

Builder confidence in 55+ market remains positive despite drop
Builders are still confident in the single-family 55+ housing market despite a marked drop in sentiment, according to the National Association of Homebuilders.

Despite a 12-point drop in the single-family 55+ housing market index (HMI) for the first quarter of the year, an index above 50 is still a good indication of builder confidence in the housing market, according to the NAHB.

The drop comes after the index hit a seasonally adjusted level of 67 points in Q4 2016 – the highest reading since the index began in 2008.

All three components of the single-family 55+ HMI experience a quarter-over-quarter decline. Present sales dropped to 62 points from 74; sales expected for the next six months went down to 68 points from 75; and traffic of prospective buyers also decreased to 34 points from 49 points.

NAHB’s other 55+ HMI is the multifamily condominium market, which remained the same at 46 points.  Quarter-over-quarter, its present sales component remained unchanged at 50 points; sales expected for the next six months dropped to 47 points from 52 points; and the traffic of prospective buyers rose by two points to 37 from 35 points.

As for the 55+ multifamily rental market index, all four components experienced a quarter-over-quarter decline. Present production dropped to 50 points from 54 points; production expected for the next six months dipped to 44 points from 60; present demand for existing units dropped to 64 from 71 points; and expected demand for the next six months dropped by 14 points to 62 from 76 points.

NAHB associated the 55+ single family HMI drop as a return of confidence to a “more sustainable level” from a post-election boost in optimism in Q4 2016.


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