The National Association of Home Builders' latest 55+ Housing Market Index is reporting this week that U.S. builder confidence in the single-family 55+ housing market dropped four points to 68 in the fourth quarter of 2019.
The 55+ HMI measures two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each segment of the 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).
"Overall, builder and developer sentiment in the 55+ housing market remains positive," said Harry Miller III, chairman of NAHB's 55+ Housing Industry Council. "However, development costs and lack of labor are contributing to affordability concerns and preventing even more robust growth in the market."
For the three index components of the 55+ single-family HMI, present sales fell five points to 73, expected sales for the next six months dropped two points to 75 and traffic of prospective buyers fell four points to 51.
The 55+ multifamily condo HMI rose five points to 58. All three index components posted increases from the previous quarter: Present sales rose four points to 60, expected sales for the next six months went up five points to 61 and traffic of prospective buyers increased six points to 53.
All four components of the 55+ multifamily rental market went up from the third quarter: Present production increased eight points to 65, future expected production jumped 11 points to 66, present demand increased 10 points to 82--a record high--and future expected demand rose nine points to 83--also a record high.
"Although down from a record-high previous three quarters, the 55+ HMI is still strong at 68 and is consistent with the gradual upward trend the index has shown since 2013," said NAHB Chief Economist Robert Dietz. "The strong performance of the 55+ indices for the multifamily market, meanwhile, is in line with the surge in multifamily starts at the end of 2019."
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