Falling Household Formations
Household formations fell to about 515,000 in 2009 from as high as 1.48 million in 2004, according to the Census Bureau's American Community Survey. The number of formations in 2010 was about 981,000. The percentage of men aged 25 to 34 who live with their parents grew by almost a third during the past five years, as so-called boomerang children returned home from college or the military or lost their jobs, census figures show.
At the same time, aging baby boomers are moving in with their children to save money and share the task of child care.
"Clearly it's not all because of the bad economy," D'Vera Cohn, a senior writer with Pew, said in a telephone interview from Washington. "But it accelerated during the bad years."
Those "bad years" hammered new home sales, which are expected to fall to 305,000 this year, according to the National Association of Home Builders. Last year, 323,000 new single- family homes sold, down from a peak of 1.28 million in 2005 and the fewest since the Commerce Department began tracking data in 1963, as unemployment lingered around 9 percent and discounted prices for foreclosed homes made it tough for builders to compete.
Homebuilder Confidence
A gauge of confidence among U.S. homebuilders climbed this month to the highest level since May 2010, a sign the outlook for construction may be stabilizing. The National Association of Home Builders/Wells Fargo index rose to 20 from 17 in October, the Washington-based group said today. Readings below 50 mean more respondents said conditions were poor.
While building homes for extended families won't increase aggregate demand, it may spur interest in new designs that appeal to buyers in an era of economic stress, said Robert Shiller, a Yale University professor of economics and the co- creator of the S&P/Case-Shiller home price indexes.
"The bubble years before 2006 seemed to be a time when people were indulging in conspicuous consumption," Shiller said in a telephone interview from his New Haven, Connecticut, home, which he has opened to student boarders for the past two decades. "These days, we don't feel so good about showing off like that. If you have a relative who's been unemployed for a year, it doesn't feel the same. So you buy a house that has quarters for your mother and that feels better."
Home Within Home
A steady stream of shoppers visited Lennar's Next Gen models, dubbed "the home within a home," at a grand opening in the Rosena Ranch community in San Bernardino, California, on Nov. 5. The houses have two front doors, two kitchens, two washer-dryer sets and two living rooms.