According to the National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI) released this week, US builder confidence in the single-family 55+ housing market remained high in the fourth quarter, inching down one point from an all-time high to 82.
There are two 55+ HMIs measuring distinct segments of the 55+ housing market: single-family homes and multifamily condominiums. Each 55+ 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).
"Builders continue to report a strong market for the 55+ housing segment," said Harry Miller III, chairman of NAHB's 55+ Housing Industry Council. "However, in some parts of the country we are seeing some lost interest in multifamily communities due to COVID-19 concerns."
Two of the three index components of the 55+ single-family HMI decreased in the fourth quarter: present sales dropped one point to 87, expected sales for the next six months fell seven points to 83 and traffic of prospective buyers remained unchanged at 69.
The 55+ multifamily condo HMI fell four points to 63. All three index components also decreased from the previous quarter: present sales fell four points to 66, expected sales for the next six months decreased three points to 64 and traffic of prospective buyers dropped six points to 57.
All four components of the 55+ multifamily rental market fell in the fourth quarter: present production decreased six points to 56, expected future production dropped 16 points 45, present demand for existing units fell 13 points to 63 and future expected demand decreased six points to 65.
"Like the broader housing market, builders are dealing with increased building material costs, labor shortages and a lack of buildable lots," said NAHB Chief Economist Robert Dietz. "These supply-side issues are making it difficult to meet the strong demand for the 55+ housing market."