The housing market has rebounded after successive years of being on a downslide. Specifically, the 55+ demographics of the real estate housing market has benefitted a lot from this first quarter boom. In addition, the builder confidence of this older adult sector reaches record high, one of the highest rating recorded since the inception of the index in 2008. This is actually very good news for the whole housing market for the 55+ sector is among the biggest in number in the market today.
Carmel Ford of the National Association of Home Builders explained the recent ranking in his article published at NAHB’s own website. Read the article below to learn more.
55+ Housing Market Opens First Quarter with Record High
The NAHB single-family 55+ Housing Market Index (55+ HMI) rose six points to 72 in the first quarter of 2019, indicating that builder confidence in the 55+ housing market continues to strengthen (Figure 1). The index reading is the highest since the inception of the index in 2008.
The 55+ HMI measures two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each segment of the 55+ 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 (high, average or low for traffic).
All three components of the single-family 55+ HMI increased in the first quarter: present sales rose four points to 76, expected sales for the next six months climbed seven points to 77, and traffic of prospective buyers surged eight points to 61.
The 55+ multifamily condo HMI jumped 10 points to 57 in the first quarter of 2019, returning to its level seen in the second quarter of 2018. (Figure 2). Among its components, present sales increased seven points to 58, expected sales for the next six months climbed 13 points to 62 and traffic of prospective buyers jumped 14 points to 52. See full post here…
This high recorded builder confidence index of the 55+ housing market is good news for the entire real estate market. This means that confidence is starting to build strong confidence in the market despite it underperforming over the past years. Another noticeable improvement is the traffic of prospective buyers.
Jessica Guerin of Housing Wire also wrote about this story. For her, data shows that the older population are now looking to invest in a new nest to live out their retirement dreams. More information about this topic below.
The 55+ Housing Market is Booming
Builder confidence in this sector reaches record high
The 55+ housing market is thriving right now as more Baby Boomers look to invest in a new nest to live out their retirement dreams.
With scores of older adults looking at new single- and multifamily builds, homebuilder confidence in this market has soared to a record high.
According to the latest from the National Association of Home Builders, builder confidence in the 55+ market reached 76 in the first quarter of 2019 – up six points from the previous quarter and the highest score since the index started more than a decade ago.
All three components of the index in both the single- and multifamily categories posted gains in Q1, with present sales, expected sales and prospective buyer traffic climbing, the NAHB revealed.
“Favorable demographics and recent declines in mortgage rates have helped support demand for 55+ housing,” said NAHB Chief Economist Robert Dietz. “We expect continued growth in the 55+ housing market, provided builders are able to manage the challenges of regulatory, land acquisition and construction costs.”
Karen Schroeder, chair of NAHB’s 55+ Housing Industry Council, said the market is strong, but not without its challenges.
“Overall, demand for homes in 55+ communities remain strong as more buyers and renters in that market search for simpler living arrangements,” said Schroeder. “However, there are still headwinds that are impacting the market.”
Schroeder pointed to rising construction costs and a lack of skilled labor as problems for builders, factors that could drive up costs for buyers. See full post here…
The recent decline in mortgage rates has the support demand for 55+ housing, which was a key factor in the homebuilder confidence’s soaring to record highs. In addition, the demand for homes in the 55+ communities continues to stay strong due to more home buyers as well as tenants searching for simpler living arrangements. However, the rising construction cost and the shortage of skilled worker in the home building sector proved to be a problem that drives up the cost.
As early as January of this year, there have been signs of home-building confidence as it already rebounded from a 3-year low. Andrea Riquier of Market Watch actually wrote an excellent article about this topic. Read more below.
Home-Builder Confidence Rebounds From 3-Year Low as Housing Market Catches a Break
The numbers: The National Association of Home Builders’ monthly confidence index rose 2 points in January to a reading of 58.
What happened: The January increase reversed two months of declines and beat the Econoday forecast of a 1-point increase. The builder lobby group said falling mortgage rates were buoying sentiment among their members, though there have been other signals that housing may enjoy a rebound in 2019.
The index component that tracks current sales conditions rose 2 points to 63 while the tracker of expected conditions over the coming six months was up 3 points to 64. The gauge of buyer traffic ticked up 1 point to 44.
Any reading over 50 signals improvement.
Big picture: The reprieve in mortgage rates is certainly helping the housing market. The Mortgage Bankers Association said Wednesday that mortgage purchase applications were at the highest level since 2010.
Higher borrowing costs aren’t housing’s only headwind, however. Homes — whether newly-constructed or previously-owned — are still too pricey for buyers trying to crack this market. In its release, NAHB acknowledged that. “Builders need to continue to manage rising construction costs to keep home prices affordable, particularly for young buyers at the entry-level of the market,” NAHB Chief Economist Robert Dietz said. Learn more here…
Seeing home-builder confidence booming or reaching record highs is a welcoming sign that the housing market is off to a very good start and is in the right direction at least for the first quarter of 2019. The recent decline in mortgage rates was also a huge factor in homebuilder’s confidence. Favorable demographics and more home buyers are searching for simpler living arrangements also contribute to increasing the confidence of home builders.
With data like this on the record high means that the housing and real estate market is doing good, which is also a good opportunity to start buying a house, especially for first-time home buyers. If you’re looking for some help your first home purchase, Dependable Homebuyers can help you on your journey to a successful real estate purchase. To learn more, visit our website at https://www.dependablehomebuyers.com/texas/san-antonio/ and we look forward to hearing from you.