During the Great Recession, household formation in the U.S. was well below historic levels, dimming the demand for new homes. Although many sectors of the economy have experienced sustained recoveries, household growth still lags.
"While other measures of the housing recovery are chugging along – like foreclosures, prices, sales, and construction – household formation is lagging," reports Jed Kolko. "Thanks to years of below-normal household formation, the number of 'missing households' has accumulated."
"The majority of the missing households are young people who aren’t heading up their own households," he explains. "Instead, they’re living with their parents: the share of 18-34 year-olds living with their parents rose from around 27% before the crash to above 31%, where it remains in 2013."
"What will it take for household formation to bounce back? Jobs will help, but the job recovery for young people still has a long way to go. While more young adults are working now than a year ago, their employment rate is still much closer to the worst of the recession than to pre-recession levels."
"It could still take years before young people have built up the savings and economic security to leave the nest," Kolko concludes.
FULL STORY: Sorry, Mom and Dad: The Kids Aren’t Moving Out Yet
Wave of Household Growth Likely Cresting, Relieving Crowded Housing Markets
A recent series of data on the growth of households in the United States reveals the unprecedented scale of housing demand in recent years.
Household Formation on the Rise—For a Surprising Reason
Writing for the Terner Center for Housing Innovation at U.C. Berkeley, Jed Kolko breaks down the data on recent trends in household formation.
Explaining the National Economy's Real Estate Doldrums
Despite the housing boom in certain markets (such as New York, Los Angeles, and San Francisco), the real estate market is nowhere near the economic driver it once was.
Depopulation Patterns Get Weird
A recent ranking of “declining” cities heavily features some of the most expensive cities in the country — including New York City and a half-dozen in the San Francisco Bay Area.
California Exodus: Population Drops Below 39 Million
Never mind the 40 million that demographers predicted the Golden State would reach by 2018. The state's population dipped below 39 million to 38.965 million last July, according to Census data released in March, the lowest since 2015.
Chicago to Turn High-Rise Offices into Housing
Four commercial buildings in the Chicago Loop have been approved for redevelopment into housing in a bid to revitalize the city’s downtown post-pandemic.
Chicago Awarded $2M Reconnecting Communities Grant
Community advocates say the city’s plan may not do enough to reverse the negative impacts of a major expressway.
New Park Opens in the Santa Clarita Valley
The City of Santa Clarita just celebrated the grand opening of its 38th park, the 10.5-acre Skyline Ranch Park.
U.S. Supreme Court: California's Impact Fees May Violate Takings Clause
A California property owner took El Dorado County to state court after paying a traffic impact fee he felt was exorbitant. He lost in trial court, appellate court, and the California Supreme Court denied review. Then the U.S. Supreme Court acted.
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