Builders reported a strong market for the 55+ housing segment despite supply challenges, according to the National Association of Home Builders.
NAHB’s 55+ Housing Market Index (HMI) showed that builder confidence in the single-family 55+ housing market remained high in Q4 2020 at 82. The reading was down one point from a record high in Q3. Two of the three index components of the single-family HMI posted decreases, with present sales dipping one point to 87, expected sales for the next six months down seven points to 83, and traffic of prospective buyers unchanged at 69.
However, the pandemic has led to pullbacks in multifamily construction in some parts of the country, according to Harry Miller III, chairman of NAHB’s 55+ Housing Industry Council.
Builder sentiment in the 55+ multifamily condo dropped four points to 63. All three index components were also down from the previous quarter: present sales decreased four points to 66, expected sales for the next six months dwindled three points to 64, and traffic of prospective buyers waned six points to 57.
All four components of the 55+ multifamily rental market also weakened in the fourth quarter: present production was down six points to 56, expected future production fell 16 points 45, present demand for existing units plunged 13 points to 63, and future expected demand slumped six points to 65.
“Like the broader housing market, builders are dealing with increased building material costs, labor shortages and a lack of buildable lots,” said NAHB Chief Economist Robert Dietz. “These supply-side issues are making it difficult to meet the strong demand for the 55+ housing market.”