55+ Builder Confidence Still Positive in 1st Quarter

Filed in Councils & Committees, Economics by on May 5, 2016 0 Comments
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Camino Del Rey Senior Apartments was a Silver winner in the 2016 NAHB Best of 55+ Housing Awards.

Builder confidence in the single-family 55+ housing market remains in positive territory for the first quarter of 2016 with a reading of 56, according to the NAHB 55+ Housing Market Index (HMI) released today.

Despite the five-point dip from the previous quarter, this is the eighth consecutive reading above 50.

“Although builder sentiment in the 55+ housing sector is down slightly from its peak, overall confidence is still in positive territory,” said Jim Chapman, chairman of NAHB’s 55+ Housing Industry Council and president of Jim Chapman Homes LLC in Atlanta. “Builders for the 55+ market are doing quite well in some areas across the country, while others are experiencing challenges that are hindering production.”

There are separate 55+ HMIs for two segments of the market: single-family homes and multifamily condominiums. Each measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales are good, fair or poor (high, average or low for traffic). An index number above 50 indicates that more builders view conditions as good than poor.

Two of the three components of the 55+ single-family HMI posted decreases from the previous quarter: present sales dropped 4 points to 61, and traffic of prospective buyers went down 14 points to 38. Meanwhile, expected sales for the next six months rose 8 points to 71, the highest reading since the inception of the index in 2008.

The 55+ multifamily condo HMI rose six points to 48, with all three components showing increases as well.

Two of the four indices tracking production and demand for 55+ multifamily rentals increased in the second quarter: present production rose 4 points to 60, and current demand for existing units increased 3 points to 69. Expected future production fell 8 points to 53, and future demand dipped three points to 68.

“Many builders in the 55+ housing sector are being cautious as they face various supply constraints,” said NAHB Chief Economist Robert Dietz. “Lot availability and skilled labor shortages remain a challenge for builders in some parts of the country.”

For the full 55+ HMI tables,  go to nahb.org/55hmi.

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