In August 2016, Dave Lowman, EVP of Single-Family Business at Freddie Mac, called the 55+ age group “your next business opportunity.” What has grown to be the second-largest generation in history (approximately 67 million, currently) accounts for one-fourth of the population, but holds about two-thirds of the country’s housing wealth.
Recent data from the National Association of Home Builders (NAHB) indicate the 55 and over housing market, aka the baby boomers, is alive and well. The NAHB’s third quarter 2016 55+ Housing Market Index (HMI), which measures both the single-family and multi-family condo markets, jumped by 2 points from the previous quarter, up to a level of 59. The breakeven point for the index is 50—the higher the index is over 50, the more builders view conditions as good than poor. The third quarter was the 10th consecutive quarter in which the HMI was above 50.
The NAHB's single-family HMI was doing particularly well in the third quarter, with two of the three components within that HMI increasing over-the-quarter—the present sales component, up two points to 63, and the traffic of prospective buyers, up five points to 47. Only the expected sales for the next six months declined, falling by four points but still posting a healthy rating of 65.
A survey from GfK commissioned by Freddie Mac over the summer found that nearly 25 million of 55+ homeowners expect to move one more time, 9 million of them plan to move in the next four years, and 6.5 million of them plan to buy a house. The survey also showed that 20 million 55+ homeowners plan to either buy a house or finance age-in-renovations, which creates a significant market opportunity, according to Lowman.
“Their numbers and their housing wealth guarantee that the housing decisions of older homeowners will play an outsized role in shaping the housing opportunities available to the generations that follow them—gen X and the massive millennial generation,” said Sean Becketti, Chief Economist with Freddie Mac.
The multifamily condo HMI for the 55+ market increased by one point in Q3, up to 48.