Homeowners ages 55+ also grow wary about how COVID-19 will impact their ability to sell
Builder confidence in the market for newly-built single-family homes for those aged 55 and over has hit its lowest level since Q4 2012.
The latest National Association of Home Builders' 55+ Housing Market Index (HMI) plunged 30 points to 38 in the first quarter.
“Before the coronavirus pandemic, the 55-plus housing market was doing very well and was poised to continue on that path moving forward,” said Harry Miller III, chairman of NAHB's 55+ Housing Industry Council. “Now, many builders are in a holding pattern as potential homebuyers in that age bracket are concerned about visiting sales centers and are waiting to see how the crisis will impact their ability to sell their existing homes.”
Looking at the three components of the single-family HMI: present sales were down 25 points to 48, expected sales for the next six months sank 41 points to 34, and traffic of prospective buyers plummeted 33 points to 18.
Builders in the multifamily segment also experienced a confidence crash. The index for 55-plus multifamily condo dropped 29 points to 29 – representing the lowest reading since the fourth quarter of 2012.
All three index components saw quarter-over-quarter decreases: present sales fell 24 points to 36, expected sales for the next six months shrank 34 points to 27, and traffic of prospective buyers moved 39 points lower at 14.
The four components of the multifamily rental market were all lower than the previous quarter. Present production dwindled 18 points to 47, future expected production decreased 24 points to 42, present demand dropped 32 points to 50, and future expected demand fell 34 points to 49.
“Like the broader housing market, the 55-plus housing market has taken a significant hit due to the effects of the pandemic,” said NAHB Chief Economist Robert Dietz. “While we expect to see some further impacts in the short-term, we do expect the housing market to stabilize later this year and help lead the economy back to more solid footing. Recent stock market gains will also help the 55-plus housing sector.”
