The number of American households dropped by an estimated 1.2 million between 2005 and 2008, even though the population increased by 3.4 million in 80 of the largest metropolitan areas during that time, according to a new study by a professor at the University of Southern California. While the analysis incorporates data only through 2008, the decline in household formation likely continued through 2009.
More young people are living with their parents instead of moving out, postponing the creation of their own households. Meanwhile, more families are combining households for economic reasons, including the loss of a home due to foreclosure.
The decline in the number of households contributed to the excess supply of apartments and single-family homes on the market. The housing and mortgage industries will feel the impact of this reduction in the number of households for years to come. Also, the recession caused a five-fold increase in the rates of overcrowding, he said. A household that has more than one person per room indicates overcrowding.
The national homeownership rate has fallen to just above 67%, from above 69%. Renter household formation dropped even more than the formation of homeownership households.
Household formation should begin a return to a more normal level by 2012, as unemployment rates decline.
No comments:
Post a Comment