The 55+ housing market ended last year's fourth quarter strong, with builder confidence in the single-family market hitting a record high, according to the National Association of Home Builders' 55+ Housing Market Index.
Builder confidence in the 55+ housing market for single-family homes reached a reading of 71, up from 67 from the previous year and from 59 from the previous quarter.
This growth in confidence comes at a time when homeowners continue aging in place, as the national average homeownership tenure has nearly doubled to levels seen since the earliest data was recorded in 2000. Homeowners remained in the same home for about 4.25 years in 2000's first quarter, but as homeowners continue staying put, that figure has reached 8.18 years as of 4Q17.
With builder confidence up in the 55+ housing market, this may allude to a shift in the direction of homeownership tenure, though it may not be terribly significant as tight supply and rising home prices dissuade homeowners from moving.
"Builders and developers in the 55+ housing market are reporting strong demand across the country," said Chuck Ellison, chairman of NAHB's 55+ Housing Industry Council, in a press release. "However, regulations in some parts of the country can make it challenging to meet the demand."
The 55+ multifamily condo HMI rose in the fourth quarter, increasing to 54 from 46 from the previous year and from 51 from the previous quarter. In the 55+ multifamily rental market, the components for both present and expected production over the next six months also increased both annually and quarterly; present production grew to 62 from 54 year-over-year and from 59 quarter-over-quarter, while expected production increased to 61 from 60 from the previous year and from 57 from the previous quarter.
"The strong performance of the 55+ HMI at the end of 2017 is consistent with recent increases in broader measures of the housing market, including the NAHB/Wells Fargo HMI," said NAHB Chief Economist Robert Dietz in a press release.
"We expect continued growth in the market for new 55+ housing in 2018 due to favorable demographics, rising homeowner wealth and the current tight supply of existing homes on the market," he continued.
NAHB's 55+ Housing Market Indexes are based on a quarterly survey of NAHB members involved in the 55+ housing market. The survey is designed to monitor conditions in three distinct segments of the market: 55+ single-family, 55+ multifamily condo and 55+ multifamily rental.