The aging of America seems to be stoking the enthusiasm of homebuilders about catering to the senior set. The National Association of Home Builders (NAHB) conducts a survey among its new home builders each quarter, similar to the monthly one it conducts to calculate its Housing Market Survey (HMI.) The quarterly survey however is focused on the over 55 housing market.
NAHB reports that its fourth quarter 55+ HMI jumped 12 points to a record higher of 71. It was the 15th consecutive quarter in which the index has exceeded 50, the break-even point at which more respondents view conditions as good than poor.
As in the monthly survey, builders are asked to categorize their current perceptions of the market and their expectations for the next six months as good, fair, or poor. They are also asked to rate prospective buyer traffic as high, average, or low.
In the single-family segment, the HMI reached a record high not only overall, as reported above, but also for positive responses regarding current sales, up 14 points to 29. The component reflecting future expectations jumped 10 points to 73 and responses about buyer traffic was up 7 points to 51.
The 55+ HMI has an additional refinement. In addition to the single-family index reported above, there is a separate segment for multifamily condominiums. Responses in that segment were a little less enthusiastic, but the overall HMI rose 3 points to 54, The index component for present sales increased 4 points to 59 and expected sales for the next six months climbed 5 points to 60. Responses regarding buyer traffic were unchanged at 40.
NAHB also generates supply and demand measures for the 55+ multifamily rental market. The measure of current production increased 3 points to 62, and that for expected future production was up 4 points to 61 in the fourth quarter. The index reflecting present demand fell 4 points to 71 and the one for future expected demand dropped 9 points to 67.
NAHB's Carmel Ford said, "The fourth quarter 55+HMI readings reflect a strong 55+ housing market, driven by favorable demographics and rising homeowner wealth. The readings are consistent with other indices measuring the housing market, such as the NAHB/Wells Fargo HMI, which also increased considerably at the end of 2017."