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Housing Market for Baby Boomers Soaring

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The National Association of Home Builders’ (NAHB) 55-Plus Single-Family Housing Market Index (HMI) hit its highest level since its inception in 2008, rising six points to 72 in Q1 2019.

The HMI finished 2018 at 66, which was nearly a six-point increase from Q3 2018. The HMI’s previous all-time high was 71 in Q4 2017.

The HMI measures two segments of the 55-plus housing market: single-family homes and multifamily condominiums. Each segment of the 55-plus HMI 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.

According to the report, present sales increased to 76, expected sales for the next six months grew to 77, and traffic of prospective buyers increased eight points to 61.

“Favorable demographics and lower mortgage rates have helped to increase demand in the 55-plus housing market,” the report stated. “However, it is important to note that supply-side challenges, such as regulatory, land acquisition, and construction costs, continue to temper growth.”

This report comes on the heels of Freddie Mac reporting that mortgage rates dipped to 4.14%, and projected to be a quarter to half a percent lower than they were last year.

According to Freddie Mac’s report, 30-year fixed-rate mortgages dropped 0.41% year-over-year, and fell 0.06% from last week’s 4.20%. This was the first reported decrease in nearly a month.

Rates for 15-year fixed-rate mortgages saw a similar decline, coming in at 3.6%, which is a 0.43% decline from 2018. The week-to-week rate fell just 0.04% from 3.64%.

For historical context, 30-year fixed-rate mortgage rates were at 4.84% as of May 7, 2009.

Long-term mortgage rates have been brought down to around 4%, partly due to the Fed’s decision to hold off on further rate hikes for now. Before the Fed’s decision, realtor.com’s data suggested an increase in upward momentum spurred by continued economic growth and monetary policy tightening.

Federal Reserve announced Wednesday that it will be keeping the federal funds rate at 2.25% to 2.50%.

THE NAHB's HMI reported a new all-time high of 72 for Q1 of 2019. The previous all-time was 71, which was reached in Q4 of 2017.

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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