Builder confidence in the single-family 55+ housing markets has bounced back to its record-high reading as aging homeowners downsize their homes, spurring demand from prospective buyers.
The National Association of Home Builders’ 55+ Housing Market Index (HMI) showed that the reading for single-family sector edged up one point to 72 in the third quarter with components tracking present sales rising two points to 78, expected sales for the next six months declining one point to 77, and traffic of prospective buyers down one point to 55.
“The 55+ market has been supported by strong demand as aging baby boomers continue to seek downsized homes, but with higher-end features and amenities,” said Karen Schroeder, chair of the NAHB 55+ Housing Industry Council. “While conditions remain positive, headwinds such as labor shortages and rising construction costs are still dampening the market a bit.”
Meanwhile, the 55+ multifamily condo HMI dropped six points to 53, with all three components reporting declines from the last quarter: present sales tumbled five points to 56, expected sales for the next six months plunged nine points to 56, and traffic of prospective buyers dipped three points to 47.
“Demand for 55+ single-family housing remains strong, mirroring the gains we have seen in the overall market, which has been largely supported by low-interest rates and healthy job growth,” NAHB Chief Economist Robert Dietz said. “Sentiment about the 55+ multifamily market declined somewhat this quarter, but on balance remains positive. A modest decline was not surprising, given the post-great recession record number of apartments currently under construction.”