1. Economic & Market Forecast for the 50+ Housing Industry
JANUARY 20, || 3:00 – 4:00 PM
Presenter:
Paul Emrath || NAHB, Washington, DC

2. Session Description
Builder and developer confidence in active adult and other mature market housing has finally begun to rebound. Younger buyers are eagerly purchasing the older generation's existing homes, and older adults are starting to visit new, age-friendly communities in greater numbers. In this session, an NAHB economist and a nationally- known market analyst will present data on the size and health of the 50+ market sector, information on economic and demographic trends, and specific information about what 50+ home buyers truly want in a new home.

3. Learning Outcomes
Find out what is happening in the housing industry today, with a focus on the way the 50+ segment is currently performing versus other market sectors.
Understand both the short- and long-term outlook for the 50+ market by analyzing economic factors that directly impact this market.
Examine emerging economic and demographic trends and how they will affect the growth of 50+ communities.
Gain insight to help builders, developers and other 50+ professionals plan for the future.

4. Paul Emrath Vice President, Survey and Housing Policy Research National Association of Home Builders
Topics
Indicators of a growing market
Homes purchased by 55+ buyers: What, Why & How

5. Single-Family Starts Overall market recovering, but still has a way to go
1,343,000
2011
434,000
2012
537,000
2013
621,000
2014
641,000
2015
804,000
2016
1,102,000
2016Q4:
90%
2014Q3:
49% of “Normal”
Trough to Current:
Mar 09 = 353,000
Nov 14 = 677,000
+92%
Once home sales pick up, housing starts will follow was the worst year since the early 1940s so there is a lot of room for improvement and 2103 saw modest improvements will temper that speed as consumers readjust to a slower growing economy.

6. Existing Home Sales 55+ customers often sell existing homes before buying new

7. Pent Up Demand: Six Years of Below-Normal Sales
Shortfall concentrated among younger buyers
Age of Household Head
Existing Home Sales Gap (Number Below Norm)
2014P
2013
2012
2011
2010
2009
Total
Under 25
78,245
79,265
80,642
81,518
38,849
9,810)
348,709
25 to 34
299,567
376,395
449,638
523,377
420,078
318,972
2,388,026
35 to 44
212,999
279,733
342,993
406,623
381,887
353,070
1,977,305
45 to 54
162,364
201,075
239,168
277,561
225,205
173,871
1,279,244
55 to 64
136,620
191,917
239,529
285,037
220,923
161,382
1,235,409
Over 65
5,376
12,818
20,759
26,525
45,746
62,335
173,560
895,172
1,141,203
1,372,728
1,600,641
1,332,688
1,059,820
7,402,253
If employment, lending standards improve, 55 Plus will eventually get a push from younger households entering the market.
Source: NAHB projections based on data from the American Housing Survey, U.S. Census Bureau and HUD.

8. Share of U.S. Households Age 55+ Growing and projected to continue growing
Source: NAHB Long Term Forecast

9. A Market Often Driven by Accumulated Wealth Average Net Worth by Age of Household Head ($)
Source: 2013 Survey of Consumer Finances, Federal Reserve Board of Governors

10. 55+ Housing Market Index (HMI)
Quarterly index of 55+ builder sentiment
Similar to NAHB/Wells Fargo HMI
Survey asks builders to rate markets “good”, “fair” or “poor”
Index created for each submarket:
Scale of 0 to 100
50 when “GOOD” = “POOR”
Not yet seasonally adjusted, compare only year-over-year

11. NAHB 55+ HMI: 55+ Single-Family HMI 2011 2012 2013 2014 Q3 Q4 Q1 Q2 12
2011
2012
2013
2014 Q3 Q4 Q1 Q2
55+ Single-Family HMI 12 18 27 29 36 28 46 53 50 48 56 59
55+ Multifamily Condo HMI 10 13 15 19 23 38 43 37 35 39 41
Multifamily Rental:
Production 25 34 31 42 52
Demand for Existing Apartments 40 62 60 54 55 64
Source: 55+ Housing Market Index, 3rd Qtr. 2014
Note: Numbers are not seasonally adjusted; only compare columns year-over-year

12. NAHB 55+ HMI: New 55+ Single Family Home Sales

13. NAHB 55+ HMI: New 55+ Multifamily Condo Sales

14. NAHB 55+ HMI: Production of New 55+ Rental Apartments

15. NAHB 55+ HMI: Demand for Existing 55+ Rental Apartments

16. Age-Restricted Housing Starts (in Thousands) Upward trend apparent Single-family: As many in 1st Half of 2014 as in all of 2012
Single-family Starts
Growth Rate
All
Age-restr.
2013
15.4%
37.5%
2014p
3.7%
49.6%
** Annual projection based on starts through 1st half of the year only.
Source: Survey of Construction, U.S. Census Bureau and HUD

17. American Housing Survey (AHS)
Based on a panel of homes, augmented for new construction
Conducted every other year by the Census Bureau,
Funded by HUD (about $30 million a year)
2013 data released late last year
Lets us look at, among other things, homes bought in the past year & who bought them, e.g.,
Age 55 Plus (based on laws governing age-restricted housing)
Millennials: age 33 or younger
Tweeners: 34-54

18. Homes Bought in the Past Year (2013 AHS): Basic Characteristics
Millennials
Tweeners
Age 55 Plus
Structure Type
Single-Family Detached
78%
85%
74%
Single-Family Townhome 6% 5% 9%
Multifamily Condo 8%
Manufactured Housing 7%
Year Built
Before 1980
50%
46%
45%
22%
26%
18%
17% 4%
SF detached dominates,
but less so for Millennials & 55+ (likely for different reasons)

19. Homes Bought in the Past Year (2013 AHS): Price of Homes Purchased

20. Homes Bought in the Past Year (2013 AHS): Price Distribution
Millennials
Tweeners
Age 55 Plus
under $100,000
27.2%
22.8%
33.4%
$100,000 to $149,999
23.4%
15.0%
15.8%
$150,000 to $249,999
28.8%
23.9%
19.5%
$250,000 to $349,999
12.4%
13.1%
$350,000 to $499,999
5.6%
12.7%
8.2%
$500,000 to $749,999
2.4%
5.5%
$750,000 or more
0.3%
4.3%
4.4%
100.0%
Overall market is bottom heavy
55 Plus share higher at the extremes

21. Homes Bought in the Past Year (2013 AHS): Square Feet of Living Space

22. Homes Bought in the Past Year (2013 AHS): Size Distribution (square feet of living space)
Millennials
Tweeners
Age 55 Plus
<1,200
26%
19%
24%
1,200 to 1,599
16%
1,600 to 1,999
23%
17%
2,000 to 2,499
15%
18%
2,500 to 2,999 8%
11%
10%
3,000 to 3,999 5%
13% 7%
4,000 to 4,999 2% 3%
>5,000 1% 4%
100%
In the top 5 size categories,
55+ shares are
lower compared to tweeners
(but not Millennials)

23. Median Size of Home Buyers Currently Have and Would Like to Have (in square feet) by Age of Buyer
Source: What Home Buyers Really Want, NAHB, 2013.

24. Median Size of Single-Family Homes Started (square feet)
*Based on 1st 6-months of data only
NAHB tabulation of data from the Survey of Construction, U.S. Census Bureau.

25. Homes Bought in the Past Year (2013 AHS): Miscellaneous Characteristics
Millennials
Tweeners
Age 55 Plus
Avg No Rooms
6.1
6.7
6.0
Avg No Bathrooms
2.0
2.3
2.1
Avg No Bedrooms
3.1
3.4
2.9
Share with
Garage or carport
78.9%
83.2%
81.7%
Separate dining room
51.5%
61.5%
50.7%
Family or great room
15.6%
25.4%
22.1%

26. Homes Bought in the Past Year (2013 AHS): Top Reasons for Choosing a Location
Millennials
Tweeners
Age 55 Plus
The house itself
81.3%
77.8%
73.0%
Safety
66.5%
65.2%
60.7%
Looks/design
59.3%
60.3%
57.9%
Friends/family
53.7%
47.7%
47.1%
Familiarity
48.9%
48.4%
45.9%
Amenities
48.3%
47.9%
43.5%
Work
53.2%
46.8%
26.7%
Public services
31.3%
31.4%
24.1%
Public transportation
14.7%
15.7%
11.6%
Schools
41.6%
46.5%
11.4%
Perhaps surprisingly, older buyers are no more likely to check safety or public transit

27. Percent of Respondents
Homes Bought in the Past Year (2013 AHS): Top Reasons for Choosing the Home
For 55+ buyers everything is important: percent cite each of the six major reasons
Compared to younger buyers,
55+ are less often concerned about size and finances
Percent of Respondents

28. Homes Bought in the Past Year (2013 AHS): How Purchased
Need to sell existing home ties 55+ to the rest of the housing market.

29. Summary
Single-family housing market improving, but still has a way to go before back to normal.
Indicators point to continued growth in the 55+ segment: population share, wealth, builder sentiment, age-restricted starts.
Compared to age 34-44, homes bought by 55+ are a bit more modest—on average—but 55+ market is stronger at both the high and low end.
55+ buyers want homes ~2,100 sq ft, slightly larger than they have now.
55+ want many of the same things as younger households, but no one feature dominates housing needs to combine many desirable features.
55+ often use sale of an existing home to finance next home purchase.
55+ market likely to get a push from release of pent-up demand among younger households.

30. National Association of Home Builders
Contact Info:
Paul Emrath, Ph.D.
National Association of Home Builders
th Street, NW
Washington, DC 20005
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