Home builders in the 55+ single-family housing market grew more cautious but were still confident in the first quarter of 2016, as evidenced by a drop to 56 in from last quater's 61 in the 55+ Housing Market Index, according to the a quarterly release by the National Association of Home Builders (NAHB) Thursday morning.
Each quarter, the NAHB gauges builder sentiment in the 55+ housing market based on how builders rate current sales conditions, future sales expectations, and prospective buyer traffic on a scale of 0 to 100. A score above 50 translates into a positive outlook among builders.
“Although builder sentiment in the 55+ housing sector is down slightly from its peak, overall confidence is still in positive territory,” said Jim Chapman, chairman of NAHB's 55+ Housing Industry Council and president of Jim Chapman Homes LLC in Atlanta, in a statement. “Builders for the 55+ market are doing quite well in some areas across the country, while others are experiencing challenges that are hindering production.”
Standing at a score of 56, the 55+ HMI index is about 8% below the score in the last quarter, and about 4% lower than the reading a year earlier. But in general, this quarter's index remains in a healthy range seen lately. The builder sentiment for the 55+ single-family portion once dipped to 12 during the aftermath of the housing crisis in 2011.
One of the three components in the 55+ single-family index made some significant progress in this quarter, as sales expectation for the next 6 months climbed to 71 from last quarter's 63. Current sales and traffic of prospective buyers, on the contrary, both lost some momentum to a reading of 61 and 38, respectively.
“Many builders in the 55+ housing sector are being cautious as they face various supply constraints,” said NAHB Chief Economist Robert Dietz in a statement. “Lot availability and skilled labor shortages remain a challenge for builders in some parts of the country.”
See the full release on NAHB here>>