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.

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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)