As BUILDER's John McManus reported this morning, about one in five households in the U.S. are headed by a resident age 55 or older. As boomers start to retire in droves, the 55+ home market will become crucial for builders, and they will increasingly need to meet the demand for Active Adult product.

Each quarter, the National Association of Home Builders (NAHB) gauges builder sentiment in the 55+ housing market based off how builders rate current sales conditions, future sales expectations, and prospective buyer traffic on a scale of 0 to 100.

According to the 55+ Single-Family HMI data released by the NAHB this morning, home builders in the 55+ housing market were able to shake the chill of seasonal slowdown in the fourth quarter of 2015, with the composite score reaching the highest level seen in 2015. With a reading of 61 (a one point increase quarter-over-quarter), builder sentiment is also at highest level seen for the 55+ single-family portion of the index since the downturn in 2008.

According to NAHB Chief Economist David Crowe:

" The 55+ housing market is benefiting from growing home equity on the balance sheets of 55+ households, an improving economic outlook, historically low mortgage rates and a growing population as baby boomers age. "

Only one of the three components in the 55+ single-family index posted an increase in the 4th quarter, with current sales conditions maintaining a score of 65 from the 3rd quarter, and sales expectations for the next six months dropping four points to 63. The -5.97% decrease quarter-over-quarter for future sales expectations stands in contrast to a six-point gain for traffic of prospective buyers, jumping 13.04% quarter-over-quarter to a score of 52. While the two would seem to inform one another, it is nonetheless a promising sign for builders targeting the aging boomer population.

Although concentrated on the 55+ buyer market, this quarter's reading is in line with other indices that indicate a steady, gradual recovery is still underway in the single-family housing market, and is likely to continue.