Dive Brief:
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Builder confidence in the strength of the market for homes designed for older homebuyers waned in the second quarter, the National Association of Home Builders reported Thursday.
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The association’s 55+ Housing Market Index dipped slightly since the first quarter, although it remained in “positive territory” with a reading of 57, the NAHB said. A reading of greater than 50 indicates that more homebuilders than not are positive about the short-term future performance of a market.
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Although the reading has remained greater than 50 for five consecutive quarters, builders this time downgraded their view of current and expected single-family home sales over the next six months. They gave high marks to the the measure of prospective buyer traffic, indicating their high hopes that activity through their for-sale properties will remain heavy in the coming months.
Dive Insight:
The builders' faltering optimism is directed mostly at the single-family, 55-plus market. In fact, they are feeling more optimistic about the near future of the 55-plus condominium market; the index showed an increase of five points overall and 10 points for expected sales of multifamily units.
That sentiment is backed up by housing starts in the multifamily sector — regardless of niche. Multifamily construction grew by 29.4% in June, the U.S. Department of Commerce reported last month.
The builders aren't so sure about for-rent apartments, however: All four indices tracking production ad demand of 55-plus multifamily rentals declined in the second quarter: present production, expected production, current demand, and future demand.
The measures reflect a cautious attitude among homebuilders, NAHB Chief Economist David Crowe said in a statement. “Lot availability and skilled labor shortages remain a challenge in some parts of the country,” he said.