Baby boomers increasing homebuilders’ confidence
Homebuilders are confident in baby boomers’ single-family housing.
According to the National Association of Home Builders’ 55+ Housing Market Index, builders in the fourth quarter of 2016 hit the highest confidence number for single-family 55+ housing market since the study’s start in 2008.
The reported stated that an index above 50 is positive, and this most recent index hit 67, an 8-point increase from the third quarter of 2016. Index factors include current sales, prospective buyer traffic and perceived six-month sales for that market. All factors for the index for the 55+ market increased in the fourth quarter.
“The significant increase in the index reading is attributed partly to a post-election boost, as many builders and developers are encouraged by President Trump’s commitment to cut burdensome regulations that negatively impact small businesses,” said Dennis Cunningham, chairman of NAHB’s 55+ Housing Industry Council. “Builders and developers in this market segment are also encouraged by the fact that for the next 15 years, 10,000 baby boomers will be turning 65 every day. The consistent pressure of this age group wanting to downsize from a large home, shifting to other regions of the country or just simply looking for a newer home or community also play a key role in the index movement.”
Multi-family condo Housing Market Index for 55+ saw a slight decrease in the fourth quarter, dropping 2 points to 46.
“The strong performance of the 55+ HMI at the end of 2016 is consistent with recent increases in broader measures of the housing market, including new home sales and the NAHB/Wells Fargo HMI,” said NAHB Chief Economist Robert Dietz. “We expect continued growth in the 55+ market in 2017, although builders in many places will still face challenges in finding adequate supplies of inputs like labor and lots.”