Builder confidence in the 55-plus housing market for single-family homes fell three points to 12 compared to the same period a year ago, according to the latest National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI) released yesterday.
"The current state of the economy continues to affect buyers in the 55-plus housing market," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. "The market remains weak given the many uncertainties people face in this economy. While potential buyers exist, they are hesitant to commit to buying a new home as they are concerned about selling their existing home at a fair price, due to low appraisals, an abundance of foreclosures and tighter mortgage lending criteria."
The 55-plus single-family HMI measures builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for the 55-plus single-family market. A number greater than 50 indicates that more builders view conditions as good than poor. Among the index components, present sales dropped four points, to 11. Expected sales (six months into the future) dropped nine points, to 15. Traffic of prospective buyers rose two points, to 13.
While staying even compared to a year earlier, the 55-plus multifamily condo HMI still remains weak with an index level of 10. Present sales dropped one point, to 9, while expected sales dropped four points, to 10. Traffic of prospective buyers rose two points, to 11.
Alternatively, 55-plus multifamily rentals remain the strongest segment of the 55-plus housing market, with the index measuring present demand rising 12 points to 40, and the one measuring future demand up 10 points to 42. Current and future production indices for 55-plus multifamily rental units also jumped in the third quarter from a year ago, up 11 points (to 25) and 10 points (to 26), respectively.
"Multifamily rental units continue to be the bright spot in the 55-plus housing market," said NAHB Chief Economist David Crowe. "However, with demand currently running ahead of production, as it has been for several quarters now, the risk of a shortage of rental units in select markets in the future looms larger as builders continue to have trouble obtaining credit to finance new construction."
For the full 55-plus HMI tables, visitwww.nahb.org/55HMI.