Builder Confidence in the 55+ Housing Market Continues to Improve in the Third Quarter

Builder Confidence in the 55+ Housing Market Continues to Improve in the Third Quarter

WASHINGTON, Nov. 8 - Builder confidence in the 55+ housing market for single-family homes showed significant improvement in the third quarter of 2012 compared to the same period a year ago, according to the National Association of Home Builders' (NAHB) latest 55+ Housing Market Index (HMI) released today. The index more than tripled year over year from a level of 12 to 36, which is the highest third-quarter reading since the inception of the index in 2008.

"Many builders and developers in the 55+ housing segment are reporting an increase in demand from consumers," said NAHB 50+ Housing Council Chairman W. Don Whyte. "We are seeing improvement in certain parts of the country where people are moving off the fence and either purchasing a home or renting an apartment that is designed to more specifically suit their lifestyle."

There are separate 55+ HMIs for three segments of the 55+ housing market: single-family homes, multifamily condominiums and rental apartments. Each index measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor than good.

Although all components of the 55+ single-family HMI remain below 50, they at least doubled from a year ago: present sales climbed 25 points to 36, expected sales for the next six months increased 27 points to 42 and traffic of prospective buyers rose 20 points to 33.

The 55+ multifamily condo HMI had a significant increase of 13 points to 23, which is the highest third-quarter reading since the inception of the index in 2008; however, condos remain the weakest segment of the 55+ housing market. All 55+ multifamily HMI components increased considerably compared to a year ago as present sales rose 13 points to 22, expected sales for the next six months jumped 19 points to 29 and traffic of prospective buyers climbed 11 points to 22.

Meanwhile, the 55+ multifamily rental indices, which already recovered substantially last year, showed continued but more modest increases in the third quarter: present production climbed six points to 31, expected future production increased nine points to 35 and current demand for existing units and expected future demand improved two points to 42 and 44, respectively.

"Like other segments of the housing industry, the market for 55+ housing is continuing on a steady upward path, driven by improving conditions in additional markets around some parts of the country" said NAHB Chief Economist David Crowe "While we expect the upward trend to continue as the recovery broadens, the speed of the recovery is being constrained by factors as tight mortgage credit, making it difficult for potential 55+ customers to sell their current homes, and shortages of inputs to construction such as buildable lots that are beginning to emerge in some market areas."

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ABOUT NAHB: The National Association of Home Builders is a Washington-based trade association representing more than 140,000 members involved in remodeling, home building, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for this year.

Follow NAHB on Twitter at www.twitter.com/NAHBMedia.

The Latest New Home Design Trends

Each year at the National Association of Home Builders’ International Builders’ Show, the Best in American Living Awards (BALA) provide recognition to builders and design professionals who have accomplished outstanding design achievements. Awards are given in all sectors of the residential housing industry, including single-family production, custom, rental, affordable, interiors, remodeling, community and international.

The BALA awards spotlight the latest design trends, and are often a sign of what will become popular in new residential construction around the country. Here are a few of the top trends home buyers can expect to soon see in new home designs, if they aren’t already:

Classic yet Contemporary

Homes that are hot sellers on the market right now are those that successfully blend old styles with new. Timeless and elegant spaces are created by blending modern and traditional elements such as crown molding with fewer or less fancy pieces. Elevations are clean and simple and interiors are fresh and light, not ornate and heavy like the formerly-popular elements such as ornamental columns, complex crown molding and cabinetry with additional applied decorative pieces.

Multigenerational Living

Given the increasing cultural diversity in America as well as the state of the economy during the past few years, many families are all living under one roof. To save money, young adults are living at home after they graduate school, and retired parents are sharing homes with their grown children and their families. Single-family home designs accommodate multigenerational households, such as homes with two master suites, often with at least one located on the ground floor to be more accessible.

Cost Effective Designs

Rectangular home designs are more cost effective, so new homes no longer have the “exploding house” look with multiple, odd roof lines or the unnecessary interior volumes they create. But home designs can still be visually stimulating with creative and innovative modifications that reduce construction and system costs to the home owner. For example, mixing materials such as metal, wood and stone in the façade give a home a modern look.

The Family Triangle

Open floor plans is a trend that isn’t new, but has expanded.  Ground-floor focused, open floor plan living spaces used to be specific to certain regions and generations, but now it is desired by all buyer profiles across the country. Many designs eliminate the living room and add a flex space or den adjacent to the kitchen or family room to allow for privacy when needed, and still accommodate flexibility for many different uses.

Kitchen Entertaining with a View

The kitchen remains one of the most important rooms in the house. Yet kitchens are still a modest size as the average overall square footage of new homes has decreased in the past few years. So designers are incorporating creative storage solutions to both suit the home owners’ unique needs and to allow more windows above the countertops rather than cabinets to retain a feeling of open, light space. 

Green Design Elements that Consumers Understand and Want

The 2011 BALA entries reflected the fact that home buyers now expect a certain level of green design in their new homes that provide both comfort and cost savings. Green technologies such as tankless water heaters and highly efficient HVAC systems that directly impact and reduce operating costs are commonly installed in new construction.

To see all the winners of 2011 BALA awards, go to www.nahb.org/BALA. To find a professional home builder or remodeler in the Grand Traverse Area go to www.hbagta.com.

Single-Family Housing Starts Rise 4.4 Percent in December

WASHINGTON, Jan. 19 - Nationwide production of new single-family homes rose 4.4 percent to a seasonally adjusted annual rate of 470,000 units in December, according to newly released figures from the U.S. Commerce Department. This marked a third consecutive increase and the fastest pace of single-family housing starts since April of 2010. Meanwhile, the overall number of housing starts for the month declined 4.1 percent to a 657,000-unit rate due to a 20.4 percent dip on the more volatile multifamily side.

"Today's report adds to the growing evidence that demand for new, single-family homes is finally starting to firm up in an increasing number of markets nationwide," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "This emerging trend is allowing builders to put more crews back to work, and could be even stronger if not for the overly tight credit conditions that prevail for both builders and buyers, as well as the continuing foreclosure crisis and the challenges of obtaining accurate appraisal values on new homes. Policymakers should be doing everything possible to alleviate these problems and nurture the fledgling housing recovery in order to promote job and economic growth."

"This report is in keeping with our expectations for slow but steady improvement in the single-family market, where production hit its lowest yearly rate in over 50 years in 2011," said NAHB Chief Economist David Crowe. "Meanwhile, it should be noted that the decline in multifamily starts in December was coming off a dramatic increase from the previous month and simply brought that sector back closer to trend. Apartment production generally continues to gain strength heading into 2012 after posting a more-than 50 percent gain in 2011." Looking forward, NAHB is forecasting gains of approximately 17 percent in both single- and multifamily housing production in 2012.

Combined single- and multifamily housing starts fell 4.1 percent to a 657,000-unit rate in December due to the multifamily side retreating 20.4 percent from a big gain in the previous month, to a seasonally adjusted annual rate of 187,000 units. However, for the year as a whole, overall housing production was pegged at 606,900 units, which was 3.4 percent better than the overall number of starts in 2010.

Regionally, December housing starts rose 54.8 percent in the Midwest following a big decline in the previous month. The Northeast posted a 41.2 percent decline that offset a big gain in the previous month, while the South and West also posted declines of 3.0 percent and 17.6 percent, respectively.

Permit issuance, which can be an indicator of future building activity, held virtually flat at a 679,000-unit rate in December. Single-family permits rose for a third consecutive month, by 1.8 percent to 444,000 units, while multifamily permits declined 3.7 percent to 235,000 units.

Regionally, permits rose 5.8 percent in the Midwest and held unchanged in the West, but declined 6.5 percent in the Northeast and 0.6 percent in the South in December.