The number of new households being formed has finally recovered post-recession, according to a new study from the University of Southern California. New household formation is a driver of housing demand.
The study, from the university’s Lusk Center for Real Estate, found that household formation has recovered to a pre-recession level of 1 million per year after bottoming out at close to zero new households from 2008 through 2010.
“The freeze in formations is over and people are again moving out and forming households,” Gary Painter, research director for the Lusk Center, said in a press release. “This means that real estate professionals and policy makers should not keep waiting for pent-up demand.” Painter added that he did not think household formation would continue to influence the housing recovery.
According to the study by Lusk, household formation typically recovers within three years of an increase in unemployment.