One of the factors contributing to the positive outlook for new single-family 55+ housing is the slow but steady increase in existing home sales in the last three months, as the market for new 55+ homes is typically driven by consumers being able to sell their existing homes at a favorable price in order to buy in a 55+ community.
NAHB produces several 55+HMIs to cover various aspects of the 55+ market. The indices are based on a survey of builders. Their answers are converted to index on a scale of 0 to 100, where 50 represents a key break-even point. An index above 50 means that the number of builders reporting good conditions in a segment of the 55+ market outnumber those reporting that conditions are poor.
In the second quarter, the 55+ HMI for multifamily condos dipped five points to 38. That, however, that is the second highest reading for the second quarter since the inception of the 55+ condo index, and far above where it had been prior to 2013.
Meanwhile, the indices tracking production and demand of 55+ rental apartments moved in opposite directions in the second quarter. Present production of 55+ rentals improved three points year-over-year to 53, while expected future production increased one point to 53. Demand for existing rental apartments, which recently has been the strongest segment of the 55+ housing market, declined slightly year over year. Current demand dropped three points to 59, while future demand fell two points to 61.
For more information about NAHB’s 55+ HMI, including the complete history of each index and its components, see www.nahb.org/55HMI