Housing shortages and low interest rates drove a spike in builder confidence in the single-family 55+ housing market in the second quarter, according to the National Association of Home Builders.

“Low supply of existing homes and low interest rates are key factors in helping the 55+ housing market bounce back to where it was at the beginning of the year,” said Harry Miller III, chairman of NAHB’s 55+ Housing Industry Council.

NAHB’s 55+ Housing Market Index (HMI) jumped 27 points to a reading of 65, with both single-family home and multifamily condominium segments of the index posting gains.

Current sales (up 24 points to 72), buyer traffic (up 36 points to 70), and the six-month outlook (up 28 points to 46) for single-family 55+ homes improved in the second quarter.

The multifamily condo HMI also bounced back, with present sales up 18 points to 47, expected sales for the next six months up 25 points to 52 and traffic of prospective buyers up 25 points to 39.

All four components of the 55+ multifamily rental market rose quarter over quarter: present production climbed nine points to 56, expected future production went up 12 points to 54, present demand for existing units grew 11 points to 61, and future expected demand posted a 15-point gain to 64.

“Like the broader housing market, we are seeing the 55+ housing market return to pre-pandemic levels,” said NAHB Chief Economist Robert Dietz. “However, challenges such as rising lumber costs and availability of skilled labor will limit a more robust recovery.”