Looking for a growth market? How about the 55-plus homebuyer? According to the latest data from the National Association of Home Builders (NAHB), builders are getting excited about this older demographic.
The NAHB 55+ Housing Market Index (HMI) increased 10 points to 27 during the first quarter of this year. Sure, 27 is relatively low for an index that lies on a scale of 0 to 100, but it is the highest reading since the inception of the index in 2008.
“We continue to see increased optimism from builders and developers in the 55-plus housing segment,” said NAHB 50-plus Housing Council Chairman W. Don Whyte. “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-plus consumer.”
The 55-plus single-family HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor more than good. All index components remain well below 50, but increased considerably from a year ago, each reaching an all-time high: Present sales rose 12 points to 27, expected sales for the next six months increased eight points to 32 and traffic of prospective buyers rose nine points to 26.
All index components showed an increase compared to a year ago: Present sales rose five points to 14; expected sales for the next six months increased seven points to 20; and traffic of prospective buyers jumped nine points to 15.
The 55-plus multifamily rentals continue to lead the way in the overall 55-plus housing market. Present production climbed 11 points to 31, expected future production increased eight points to 35, current demand for existing units rose three points to 42 and expected future demand increased one point to 45.
“Like the overall single-family housing market, the 55-plus housing segment is facing a slow but steady recovery,” said David Crowe, chief economist for NAHB. “Consumers are starting to see the resale market show some improvement, which allows them to start thinking about moving into 55+ housing.”