Builders Report Strong Growth in the 55+ Housing Market

Builders are showing increased confidence in the over 55 single family housing market.  The National Association of Home Builders Housing Market Index (HMI) for that market has risen 19 points over the last year to 46.  First quarter results show the highest level for the senior housing HMI since the first such survey was conducted in 2008 and it was the sixth consecutive quarter in which year-over-year results improved.

NAHB looks at two markets in calculating its 55+ HMIs, the single family market and multi-family condominiums.  Builders in each market are asked their perceptions of current sales, traffic of prospective buyers and their expectations for sales over the next six months.  An index below 50 indicates that more builders view conditions as poor than good.

In the single family 55+ sector builder sentiment about present sales also rose 19 points from a year ago to 46.  Expected sales over the next six months increased 21 points to 53, and prospective buyer traffic was up 15 points to 41.   The 55+ multifamily condo HMI rose from 15 one year ago to 38, the highest first-quarter number in the survey's history.  The score for current sales rose 23 points to 37, expected sales climbed 23 points to 43, and traffic of prospective buyers was up 23 points to 38.

 "Builders and developers for the 55+ housing sector continue to report increased optimism in the market," said Robert Karen, chairman of NAHB's 50+ Housing Council.  "We are seeing an increase in consumer demand for homes and communities that are designed to address the specific needs of the mature homebuyer."

"The strong year over year increase in confidence reported by builders for the 55+ market is consistent with year over year increases in other segments of the home building industry," said NAHB Chief Economist David Crowe.  "While demand for new 55+ housing has improved due to a reduced inventory of homes on the market and low interest rates, builders' ability to respond to the demand is being limited by a shortage of labor with basic construction skills and rising prices for some building materials."

The 55+ multifamily rental indices also showed strong gains in the first quarter as present production increased 12 points to 43, expected future production rose 13 points to 48, current demand for existing units climbed 14 points to 56 and future demand increased 13 points to 58.

Communities that are designed specifically for homeowners over the age of 55 are exempted from some provisions of the Fair Housing Act and can legally exclude families with children.  To qualify for these exemptions a dwelling must either be specifically designed for and occupied by elderly persons under a state, federal or local government program, be solely occupied by persons age 62 or above, or house at least one person over the age of 55 in a minimum of 80 percent of the occupied units.