With continuing recoveries to the overall economy and the national housing market, consumers have been confident in opportunities to own homes. Additionally, a new report from the National Association of Home Builders revealed an improvement in builder confidence for the last quarter of 2012.
The 55+ Housing Market Index increased 10 percent in the fourth quarter last year, bringing the level to 28. This also marked the fifth straight quarter of strengthening.
When looking at the HMI for single-family homes, the index was below 50 but year-over-year improvements suggests long-term recovery. According to the report, the IMI moved forward 10 points to 27 with expectations for sales improving 12 points to 38. Builders also believe that activity from prospective buyers will increase, with the measurement rising nine points to a level of 24.
The 55+ multifamily condo HMI has continued to post the weakest figures, though NAHB reported a six-point gain from the previous quarter. The overall multifamily rose five points from the fourth quarter of 2011, and builders expect sales to increase over the next six months with the index rising 8 points to 25. Predictions for potential buyers also went up six points, bringing the index to 21.
One fear many builders have previously had was a lack in demand for new homes, as the inventory of delinquent and existing single-family homes were at record highs following the housing market slump. However, high affordability prompted many to make the investment in 2012, helping to eliminate surplus properties. Affordability has been extended, with expectations for mortgage rates to remain below 4 percent throughout 2013, making buying a newly constructed property desirable for many.
"We continue to see increased optimism for builders and developers in the 55+ housing segment," agreed Bob Karen, chairman of NAHB's 50+ Housing Council. "Those customers who had been on the sidelines waiting for more stability in their local markets are starting to make their move toward either purchasing a home or renting an apartment that is designed to more specifically suit their lifestyle.
While many senior citizens retire around 65, their finances are still influenced by the condition of the economy. After a staggering recession, more consumers have reported being more confident with their personal incomes and amount of household expenses, which are both important when considering homeownership.