Dive Brief:
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Barrons has predicted that a lack of mortgage availability will continue to stymie home sales in 2015, but suggests that builders can outsmart that market-buster by focusing on older buyers.
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“We believe catering to buyers who have limited income and limited capacity to pay for upgrades (i.e. first-time and subprime buyers) will likely lead to lower gross profits for the average builder,” the financial publisher said in an article.
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Barrons pointed to PulteGroup, WCI Communities, and Ryland Group as potential winners in 2015 because of their focus on older, move-up buyers who already have equity in a home and can use it to upgrade to newer, more expensive properties.
Dive Insight:
It seems more and more builders agree with this assessment. In the third quarter of this year, for example, homebuilder confidence in the 55-plus market spiked for the 12th consecutive year. They seem to have good reason for that optimism: Both sales and foot traffic through homes designed for mature owners continues to increase, according to national associations for builders and Realtors.