Builder confidence in the single-family housing market for mortgage borrowers aged 55 and older improved in the second quarter from a year ago, according to the National Association of Home Builders.
The home price index more than doubled to 20 from 13, the highest second-quarter reading since the inception of the index in 2008.
An index number below 50 indicates more builders view conditions as poor than good. Although all index components remain below 50, they increased considerably from a year ago, the NAHB noted. For example, present sales more than doubled (from 12 to 30), while expected sales for the next six months increased 17 points to 35 and traffic of prospective buyers rose nine points to 22.
"We are seeing buyers slowly return to the 55-plus housing market as home prices begin to improve,” NAHB Chief Economist David Crowe said. "This helps unlock some of the pent-up demand from 55-plus consumers who have been sitting on the sidelines until they are able to sell their current homes at a reasonable price."
Builder confidence among the 55-plus multifamily rental indices recovered substantially since the second quarter of 2011 and is holding steady, the NAHB said. Present production climbed three points to 31, expected future production increased three points to 32, current demand for existing units dropped one point to 42 and expected future demand decreased two points to 42.
The 55-plus single-family HMI 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).
In July, NAHB data revealed that homebuilder confidence of overall single-family home sales rose six points — the steepest one-month increase in more than a decade — to its highest point since March 2007.