Sorry, Mom and Dad: The Kids Aren’t Moving Out Yet [forbes.com]
Chief Economist at Trulia TRLA +3.56% takes a close look at the most important measure of the housing recovery: household formation. The latest population data show that young adults are still living with their parents — even if they have jobs.
During the recession, fewer households – one or more people living under the same roof – were created than normal. Typically, 1.1 million new households are added each year in the U.S., mostly due to population growth. However, from the first quarter of 2008 to the first quarter of 2011, only 450,000 new households were created annually. Slower household growth means less demand for homes, so annual construction starts dropped during this period from a norm of 1.4 million to below 600,000. Most recently, only 521,000 households were created between the first quarter of 2012 and the first quarter of 2013.
A big part of the slowdown in household formation was due to young people living with parents or doubling up with roommates rather than setting up house on their own.