Builders have tremendous opportunity in the 55+ housing market, which is currently the “largest growing group of buyers…ever seen” in that age category, according to the National Association of Home Builders.
While builder confidence surveys indicate that no sectors in the 55+ housing market are performing “well,” per se, all are on an upward trend, and multifamily rental housing continues to lead the way, according to NAHB’s first quarter 55+ Housing Market Index, released on Thursday.
The overall 55+ Housing Market Index increased 10 points to 27 in the first quarter. “Although 27 is relatively low for an index that lies on a scale of 0 to 100, it is nevertheless the highest reading since the inception of the index in 2008,” says NAHB.
“We continue to see increased optimism from builders and developers in the 55+ housing segment,” said NAHB 50+ Housing Council Chairman W. Don Whyte in a statement. “We are servicing the largest growing group of buyers that we have ever seen in this age category, and it is a population that is dramatically different from what it was only a few years ago. This creates an opportunity for builders and developers in this market to create communities that address the specific needs of the 55+ consumer.”
The single-family market for this age category saw all components below 50 (meaning more builders view conditions as poor than as good), but it reached an all-time high in the first quarter, with present sales rising 12 points to 27; expected sales (for the next six months) rising eight points to 32; and traffic of prospective buyers rising nine points to 26.
Multifamily rentals in the 55+ market leads the way in builder confidence, climbing 11 points to 31. Expected future production increased eight points to 35, while current demand for existing units rose three points to 42, and expected future demand increased slightly to 45 points.
The 55+ multifamily condo index didn’t fare as well and remains the weakest out of all the 55+ indices, according to NAHB. However, it reached an all-time high at 15, up seven points from last year, and all index components rose in the first quarter compared to 2011. Present sales rose five points to 14; expected sales (for the next six months) rose seven points to 20, and traffic of prospective buyers jumped nine points to 15.
Just like the overall single-family housing market, the 55+ segment is experiencing a “slow but steady recovery,” according to NAHB Chief Economist David Crowe. “Consumers are starting to see the resale market show some improvement, which allows them to start thinking about moving into 55+ housing.”
Written by Alyssa Gerace