Continuing improvements in home equity and elevated demand for homes pushed builder confidence in the 55+ housing market up for the third quarter.
The National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI) measured at a reading of 59 last quarter, up three points from Q2 and nine points from the same quarter last year. It was the highest third-quarter reading since the index was created in 2008, the group said.
"Demand for 55+ housing has never been higher, and this quarter's index clearly demonstrates that," said Steve Bomberger, chairman of NAHB's 50+ Housing Council. "Consumers in this market are looking for a home that caters toward their specific needs, and 55+ builders and developers are able to create homes and communities that address these needs."
Like NAHB's monthly confidence index, the 55+ HMI measures builder sentiment based on three separate components: current sales, expected sales in the next six months, and traffic from prospective buyers. An index reading higher than 50 indicates more builders view market conditions as good than poor.
According to the association, all index components posted increases in the third quarter compared to a year ago. Increases were led by the present sales gauge, which rose 13 points to 65, followed by the expected sales measure (up 10 points to 63) and the measure of prospective buyer traffic (up three points to 46).
"The consistent rise in home equity has contributed to the strong gains in the 55+ housing market," said NAHB Chief Economist David Crowe. "Many consumers who had been sidelined due to the inability to sell their current homes at an acceptable price are now in a position where they can sell their homes, enabling them to rent or buy in a 55+ community."