NEW YORK – Sept. 9, 2014 – Americans 55 years old and older are increasingly expected to begin trading residences as they near retirement, and that has many housing analysts and homebuilders predicting a surge in active-adult homes and communities that appeal to seniors.

Homebuilders PulteGroup, Lennar and Toll Brothers are reporting higher sales in this segment. Builders also are trying to lure this age group with multigenerational amenities, such as a separate private entrance, bedroom, bathroom, and eat-in kitchen attached to a traditional home.

"Consistent with the overall housing market, we have seen sustained improvement in demand for our active-adult homes for the past two-plus years," says PulteGroup spokesman James Zeumer. PulteGroup builds the Del Webb brand of active-adult communities. Its active-adult sales rose from about 4,100 homes in 2011 to 5,300 in 2013. Also, sign-ups for new orders in the second quarter were up 11 percent over a year earlier, Zeumer says.

The National Association of Home Builders' 55+ Housing Market Index also reflects greater optimism in the 55-plus housing market. This year, the index reached its highest second-quarter reading since it began in 2008, and it posted its 11th consecutive quarter of year-over-year gains.

"One of the factors contributing to the positive signs in the 55+ housing market is the slow but steady increase in existing-home sales in the last three months," says NAHB Chief Economist David Crowe. "The 55+ market is strongly driven by consumers being able to sell their existing homes at a favorable price in order to buy or rent in a 55+ community."

Total existing-home sales rose 2.4 percent in July, reaching the highest pace of the year but still remaining 4.3 percent below last July, which marked the peak for 2013.

"Existing-home sales are continuing to move up," says Stephen Melman, NAHB's director of economic services. "But the one caveat is the first-time home buyers' share [of those sales] was less than 29 percent. Typically, that would be 40 percent. So existing-home sales are increasing, but the first-time buyer isn't in there full tilt. So it may be the 55-plus [group] buying homes that meet their demand."

Source: "Homebuyers Age 55+ Make Move as House Values Rise," Investor's Business Daily (Aug. 28, 2014)

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