WASHINGTON -- Home builders continue to put far greater faith in multi-family housing than for single-family projects, according to the latest National Association of Home Builders' (NAHB) Housing Market Index for the 55+ market.
The HMI measures builder builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for the 55+ market. The latest HMI index for 55+ multifamily rentals climbed 12 points to 40, while the HMI for +55 single-family homes dropped 3 points to 12. A HMI number greater than 50 indicates that more builders view conditions as good than poor.
"Multifamily rental units continue to be the bright spot in the 55+ housing market," said NAHB chief economist David Crowe. "However, with demand currently running ahead of production, as it has been for several quarters now, the risk of a shortage of rental units in select markets in the future looms larger as builders continue to have trouble obtaining credit to finance new construction."
Bob Nielsen, NAHB chairman and a builder from Reno, NV, said, "The current state of the economy continues to affect buyers in the 55+ housing market. The market remains weak given the many uncertainties people face in this economy. While potential buyers exist, they are hesitant to commit to buying a new home as they are concerned about selling their existing home at a fair price, due to low appraisals, an abundance of foreclosures and tighter mortgage lending criteria."
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