An estimated 10,000 baby boomers are retiring each day, which is inevitably having an impact on the real estate market. Builder focus in the single-family 55+ retirement housing market has increased for the second quarter of 2017 with a reading of 66, an 11-point increase over the first quarter of 2017, according to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI).
It’s not only a significant quarter-to-quarter increase, but also the 13th consecutive quarter with a reading above 50, which means that more builders view conditions as good rather than poor. “Demand for 55+ housing continues to grow, and this quarter’s index is a reflection of that,” says Dennis Cunningham, chairman of NAHB’s 55+ Housing Industry Council. “Consumers in this market want a home that addresses their specific needs.”
There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominium homes. For each of the segments, the HMI measures builder sentiment in 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).
All three components of the 55+ single-family HMI posted increases in comparison to the prior quarter: Expected sales for the next six months rose 12 points to 80 (an index high), while present sales increased eight points to 70 and traffic of prospective buyers jumped 19 points to 53, also an index high.
The 55+ multifamily condo HMI rose seven points to 53, with all three components also posting gains in the second quarter: Present sales increased six points to 56 (an index high), while expected sales for the next six months and traffic of prospective buyers both increased eight points to 55 and 45, respectively.
All four indices tracking production and demand of 55+ multifamily rentals posted gains in the second quarter: Present production increased by three points to 53, expected future production increased by eight points to 52, current demand for existing units increased two points to 66 and expected future demand increased by five points to 67.
“We are seeing strong demand in the 55+ housing sector due to favorable market conditions, such as record highs in the stock market and rising home prices,” says NAHB Chief Economist Robert Dietz. “This quarter’s reading is in line with our forecast, as we expect to see continued gradual gains in 2017.”