Builder confidence in the 55+ housing market was markedly more upbeat in the first quarter of 2011 for apartment production and demand than for sales of single-family or condominium homes, according new data from the 55+ Housing Market Index (HMI), a quarterly NAHB report that tracks builder sentiment in the 55+ housing segment.
The relative strength in the 55+ multifamily rental market is consistent with other indicators that suggest pent-up housing demand will be first unlocked in rental markets, pushing rental vacancies rates down and rents up. The relative weakness on the owner-occupied side of the 55+ HMI reflects ongoing weakness in housing, particularly for 55+ buyers who in most cases must sell their existing home before purchasing a new residence.
The expected demand index for 55+ multifamily rental units rose 10 points, to 44, from a year earlier. A number greater than 50 indicates that more builders view conditions as good than poor. The indices of current and expected production of 55+ apartments gained 7 and 8 points, up to 20 and 27, respectively, in the first quarter of 2011. The index measuring current demand jumped 11 points, up to 39.