Adding to the increasing builder confidence in the 55+ housing market, the Housing Market Index (HMI) for single-family homes achieved its highest reading in four years and could be the tell-tale signal for market recovery, according to the National Association of Home Builders (NAHB).
The index for single-family homes more than tripled during the third quarter to a level of 36, compared to its reading of 12 for the same period last year. Although a rating below 50 indicates that more builders view conditions as poor rather than good, readings for single-family homes, multi-family condominiums and rental apartments showed across the board signs of growth, according to HMI data.
“Many builders and developers in the 55+ housing segment are reporting an increase in demand from consumers,” said NAHB 50+ Housing Council Chairman W. Don Whyte. “We are seeing improvement in certain parts of the country where people are moving off the fence and either purchasing a home or renting an apartment that is designed to more specifically suit their lifestyle.”
Growth in multi-family condos rose by less than that of singe-family homes, increasing 13 points to 23–the highest third quarter reading since 2008. The increases in multifamily rental indices exhibited even more modest growth for the third quarter, rising 6 points to a reading of 31.
Fanning the optimism, NAHB also recorded increases in expected sales for the next six months in all three categories. For single-family homes, a 27 point increase to 42. For multi-family condos, a 19 point rise to 29. For multi-family rentals, a 9 point increase to 35.
“Like other segments of the housing industry, the market for 55+ housing is continuing on a steady path, driven by improving conditions in additional markets around some parts of the country,” said NAHB Chief Economist David Crowe.
While NAHB expects these upward trends to continue, a few factors constrain the speed of the recovery such as tight mortgage credit and shortages of construction lots that are starting to emerge in certain market areas, according to the NAHB.
Written by Jason Oliva