Friday, November 06, 2015

NAHB: Builder Confidence increases for the 55+ Housing Market in Q3

by Bill McBride on 11/06/2015 04:41:00 PM

This is a quarterly index that was released last week by the the National Association of Home Builders (NAHB). This index is similar to the overall housing market index (HMI). The NAHB started this index in Q4 2008 (during the housing bust), so the readings were initially very low

From the NAHB: 55+ Housing Market Remains Strong in Third Quarter

uilder confidence in the single-family 55+ housing market remains strong in the third quarter of 2015 with a reading of 60, up three points from the previous quarter, according to the National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI) released today. This is the sixth consecutive quarter with a reading above 50.

“Builders have a positive outlook on the 55+ housing market,” said Timothy McCarthy, chairman of NAHB's 55+ Housing Industry Council and managing partner of Traditions of America in Radnor, Pa. “In fact, the markets for single-family, apartments and condos are all doing quite well, and we expect that trend to continue.”
...
“Like the overall housing market, we continue to see steady, positive growth in the 55+ market,” said NAHB Chief Economist David Crowe. “With the economy and job growth continuing to improve gradually, many consumers are now able to sell their current homes at a suitable price, enabling them to buy or rent in a 55+ community.”
emphasis added
NAHB 55+ Click on graph for larger image.

This graph shows the NAHB 55+ Single Family HMI through Q3 2015.  And reading above 50 indicates that more builders view conditions as good than as  poor.  The index increased to 60 in Q3 up from 57 in Q2.

There are two key drivers in addition to the improved economy: 1) there is a large cohort moving into the 55+ group, and 2) the homeownership rate typically increases for people in the 55 to 70 year old age group. So demographics should be favorable for the 55+ market.