The 55+ single family Housing Market Index (HMI) analyzed by the National Association of Home Builders (NAHB), rose to reach 46 points in the first quarter of 2013, making it the highest first quarter point recorded since the introduction of the measure in 2008.
According to the HMI, sales of 55+ single family homes rose 19 points to reach 46, expected six-month sales hiked 21 points to reach 53 and potential buyer traffic also reached 41 after climbing 15 points.
The HMI is a sample based on perceptions of builders, which operates as a gauge for determining current housing trends and predicting demand among the people aged 55 and above. The potential buyer traffic, anticipated six-month sales and current sales are analyzed to arrive at the builder confidence number. Any number below 50 is considered to be poor.
"Builders and developers for the 55+ housing sector continue to report increased optimism in the market. We are seeing an increase in consumer demand for homes and communities that are designed to address the specific needs of the mature homebuyer," Robert Karen, chairman of NAHB's 50+ Housing Council and managing member of the Symphony Development Group said in a statement.
Experts believe that the strong demand comes from the improving performance in other housing sectors as well. However, builders are still unable to respond completely to the growing demand due to shortage of construction labor and increasing prices of construction material.
"The strong year over year increase in confidence reported by builders for the 55+ market is consistent with year over year increases in other segments of the home building industry. While demand for new 55+ housing has improved due to a reduced inventory of homes on the market and low interest rates, builders' ability to respond to the demand is being limited by a shortage of labor with basic construction skills and rising prices for some building materials," David Crowe, chief economist at NAHB said in the statement.
Construction material prices are expected to go up in the coming few months as well. For the period between May to June, the overall construction material prices could go up by 2 to 3 percent, according to a trend forecast by Design Cost Data.
