Resurgent USA: New Households Form at Fastest Rate Since ’07
New Households Form at Fastest Rate Since ’07 in Resurgent U.S.
By Steve Matthews – May 1, 2011 6:01 PM CT
Millions of young adults like Webb are starting to leave their parents’ homes, creating households at the fastest rate since 2007. They’re helping to provide a so-called shadow supply that may boost U.S. housing starts more than 50 percent by next year and spur consumption at a rate almost double that of the past two years.
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Between 750,000 and 1 million new households will be created in 2011, predict UBS Securities LLC’s Maury Harris and IHS Global Insight’s Patrick Newport. That compares with just 357,000 added in the year ended March 2010, the lowest on record, according to the Census Bureau. As employment picks up, new households are likely to rise above the past decade’s average of 1.3 million a year, according to Newport.
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New households will help boost housing starts to about 648,000 this year and close to 900,000 in 2012 from 586,800 last year, estimates Brad Hunter, chief economist and national director of consulting in Palm Beach Gardens, Florida, for research company Metrostudy. The increase reflects a shadow demand for new homes among family members who have doubled up because of economic necessity, Hunter said.
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Increasing demand for homes should help offset the so- called shadow inventory of vacant properties, Hunter said. About 1.8 million residences were delinquent or in foreclosure as of January, according to March estimates by CoreLogic Inc., a Santa Ana, California, real-estate information company.
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