Builder confidence for 55+ housing market in US slumps in third quarter

WASHINGTON: The uncertain market conditions amid the Eurozone debt crisis continues to affect buyers in the 55+ housing market. According to the US National Association of Home Builders (NAHB), builder confidence in the 55+ housing market for single-family homes has dropped three points to 12 year-on-year (y-o-y).

"The market remains weak given the many uncertainties people face in this economy. "While many potential buyers exist, they are hesitant to commit to buying a new home as they are concerned about selling their existing home at a fair price, due to low appraisals, an abundance of foreclosures and tight mortgage lending criteria," said NAHB chairman Bob Nielsen.

NAHB's 55+ single-family Housing Market Indices (HMI) measures builder sentiment on new home sales, prospective buyer traffic and expected sales for the next six months.

Above 50 points indicate that builders are positive for the 55+ single-family market. The index components also indicate a present sales drop by four points to 11 and a future six months sales drop of nine points to 15, while prospective buyer traffic went up by two points to 13.

However, the outlook for the 55+ multifamily rental housing segment remains strong in the 55+ housing market as present demand increased 12 points to 40 and future demand increased 10 points to 42. Current and future production indices for 55+ multifamily rental units jumped 11 points to 25 and 10 points to 26 in the third quarter y-o-y.

NAHB chief economist David Crowe said multifamily rental units continue to look positive in the 55+ housing market with the risk of a shortage not far off.

"With demand running ahead of production, the risk of shortage of rental units in select markets in the future looms large as builders continue to have trouble obtaining credit to finance new construction."

The Washington-based NAHB represents more than 160,000 home builders involved in remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction.