More young adults may leave nest, spark economy

02/05/2015

More young adults may leave nest, spark economy

NEW YORK – Feb. 2, 2015 – Household formation may gain some momentum as more young adults look to move out of the family nest. The Census Bureau reported that 1.3 million occupied housing units were added in the fourth quarter and 1.7 million for all of 2014, up from an average of 570,000 units a year from 2007 to 2013.

Household formation has been weak because millions of Americans who lost homes during the foreclosure crisis are still repairing their credit. National Association of Realtors® chief economist Lawrence Yun also notes that wage gains are barely keeping up with inflation, and many new jobs are part-time or in low-paying sectors.

Forty-four percent of adults living with relatives plan to rent or buy homes this year, according to a UBS survey conducted in November.

The Census Bureau's estimate "could be an early sign that household formation is starting to pick up," speculates Patrick Newport of IHS Global Insight. That, he adds, "could be a big game changer" for the housing market and the economy.

Source: USA Today (01/31/15) Davidson, Paul

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