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Housing Demand Rises Among Older Consumers

homebuyersThe confidence of builders in the single-family housing market for consumers in the age group of 55 years and above is on the rise. As is the demand for homes in this age group, according to the National Association of Home Builders (NAHB) 55+ Housing Market Index (HMI).

This quarterly index measures data for single-family as well as multifamily condominium housing for older homeowners and buyers. Each segment of the 55+ HMI measures builder sentiment based on a survey on current sales, prospective buyer traffic and anticipated six-month sales for that market.

According to the NAHB When compared to the previous quarter, among the three single-family components present sales increased three points to 73, sales expected over the next six months declined three points to 77 and traffic for prospective buyers fell four points to 47. Despite the flat outlook, builders and developers remain confident and continue to see demand from consumers aged 55 years and more for housing. However, "increases in building material costs have made it challenging to meet this demand," said Chuck Ellison, Chairman of NAHB's 55+ Housing Industry Council and VP, Land, at Miller & Smith.

Robert Dietz, Chief Economist at NAHB, agreed, "Builders need to manage rising building material costs especially for lumber in order to continue providing housing at competitive prices."

But what is driving demand among consumers in this age group? According to Dietz, "Strong economic growth and rising homeowner wealth are allowing consumers to sell their current homes and buy or rent houses in 55+ communities.

The 55+ multifamily condo HMI dropped seven points to 57, however, according to NAHB, it was still the second-highest reading since the inception of the index in 2008. All three 55+ condo HMI components decreased in the second quarter: Present sales fell six points to 61, sales expected in the next six months dropped seven points to 63 and traffic of perspective buyers declined 11 points to 44.