Is this the best news for home builders in nearly a decade? Household formations in 2014 through September are already higher than any year since 2005.
According to Fortune.com and Neil Dutta, head of economics at Renaissance Macro Research, Americans are starting to form households much closer to the rate that they did before the recession.
Credit: Fortune.com
Many believe slow population growth has been partly to blame for the slow recovery of the housing industry. Much of the trend stems from the fact that the Millennials don’t have the same economic opportunities as previous generations. This has caused more millennials to live with friends or family, and has created low demand for new homes.
There’s evidence that the spike in new households is a result of improving economic conditions for Millennials. As Dutta points out, the employment rate for ages 25 to 34 has grown 2.8% over the past year, about 29% faster than the overall employment rate.
This is a good sign that Millennials will give the housing market a boost in 2015!
