Confidence Leads to New Household Formation

From the Wall Street Journal:

Americans are setting up house at the fastest rate in more than six years, an indication that recession anxiety, which prompted adult children to move in with their parents and single people to postpone marriage, is starting to ease.

The nation added 1.15 million households in the 12 months that ended in September, according to the most recent Census Bureau data. That is a significant rise from the past four years when an average of 650,000 households were formed annually. While what economists call “household formation” is running a little lower than the average 1.25 million added annually during the boom years, the latest data nevertheless represent an important shift…

While young home buyers represent one source of new households, the overall growth is due mainly to renters, many of them recent college graduates. The number of homes lived in by renters has grown by more than five million since 2006 to 39.6 million. During the same period, the number of homes lived in by owners fell 1.4 million to 75.1 million as many properties slipped into foreclosure or became vacant for other reasons. But the number of owner-occupied units is starting to rise again as buyers emerge.