The National Association of Home Builder’s (NAHB) 55+ Housing Market Index (HMI), a specialized index that follows the 55+ housing market, posted year-over-year gains for the fourth quarter in 2011. Along with gains in construction and a 29-city addition to the NAHB’s own Improving Markets Index, the index offers further signs of an uptick in builder confidence.
Based on current sales, prospective buyer traffic and anticipated six-month sales for the 55+ market over a quarterly period, the HMI rose four points to 18, with all the components of the index rising as well. Present sales rose four points to 17, expected sales for the next six months increased two points to 26 and traffic of prospective buyers rose five points to 15.
Bob Nielsen, the NAHB chairman, was positive on the results, though he cautioned restrained going forward.
“We are seeing increased optimism from builders in the 55+ housing segment,” Nielsen said. “However, the market still remains weak as many people in the mature-market sector are hesitant to buy. They are concerned about selling their existing home at a fair price, due to low appraisals, an abundance of foreclosures and tighter mortgage lending criteria.”
Unsurprisingly, the 55+ multifamily measures were also positive. The 55+ multifamily condo was up six points to 14, present sales increased five points to 12, expected sales for the next six months rose three points to 17 and traffic of prospective buyers increased five points to 15.
The biggest gain, though, came in the 55+ multifamily rentals segment: present production doubled to 34 points, expected future production increased 12 points to 35, current demand for existing units jumped 14 points to 42 and expected future demand increased 12 points to 44, which offered yet more evidence of multifamily housing’s present importance.
David Crowe, NAHB’s chief economist, mirrored Nielsen’s mixture of optimism and hesitation.
“As with the overall single-family housing market, we are seeing gradual, but steady, improvement in the 55+ market segment,” Crowe said. “A level of 18 in the 55+ HMI is the highest fourth quarter reading since inception of the index in 2008, but still a long way from a healthy housing market. Also, as with the overall multifamily rental housing sector, the 55+ rental market is showing continued strength. All of the index subcomponents are at or above their highs since index inception in 2009.”