Second Quarter Single-Family Home Builder Confidence is at Highest Level Since 2008

August 11th, 2014 by Editor

Builder confidence in the single-family 55+ housing market for the second quarter was up over last year, according to the latest National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI). Compared to the second quarter of 2013, the single-family index increased three points to a level of 56, which is the highest second-quarter reading since the inception of the index in 2008 and the 11th consecutive quarter of year over year improvements.

The 55+ HMIs consist of two separate indexes: single-family homes and multifamily condominiums. Each 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). An index number below 50 indicates that more builders view conditions as poor than good.

Two of the components of the 55+ single-family HMI posted increases from a year ago: present sales climbed seven points to 61 and expected sales for the next six months rose one point to 61. Meanwhile, traffic of prospective buyers dropped six points to 42.

While the 55+ multifamily condo HMI dipped five points to 38, it remains the second highest reading for the second quarter since the inception of the index. All three components of the index decreased for the second quarter: present sales dropped five points to 39, expected sales for the next six months fell four points to 42 and traffic of prospective buyers dropped three points to 35.

The indices tracking production and demand of 55+ multifamily rentals moved in different directions in the second quarter with present production rising three points to 53 and expected future production increasing one point to 53. Current demand for existing units dropped three points to 59 and future demand fell two points to 61.

“One of the factors contributing to the positive signs in the 55+ housing market is the slow but steady increase in existing home sales in the last three months,” says NAHB chief economist David Crowe. “The 55+ market is strongly driven by consumers being able to sell their existing homes at a favorable price in order to buy or rent in a 55+ community.”

Full 55+ HMI tables can be found here.

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