Census Data Points to Upturn in Housing Demand

The Census Bureau has confirmed what we suspected all along: a lot of people are doubling up with family members because of the economy. And as Phil Izzo writes in the Wall Street Journal's Real Time Economics blog today, that means we're likely to see a big jump in household formation and thus demand for housing once the economy finally does start to grow.

The blog states that as part of its wider report on income, poverty and health insurance, the Census Bureau noted a big jump in the number of individuals and families doubling up. The report says 69.2 million, or 30%, were doubled-up in 2011, up from 61.7 million adults, or 27.7%, in 2007. “Doubled-up” households include at least one person 18 or older who isn’t enrolled in school and isn’t the householder, spouse or cohabiting partner of the householder.

Furthermore, much of the increase comes from young people, ages 25-34, living with their parents. Some 5.9 million, or 14.2% of 25-to-34 year olds, lived with their parents in 2011, up from 4.7 million before the recession.

Izzo concludes that it's likely most of this doubling-up is not permanent, and that when economic conditions improve that many of the people living with mom and dad will hit the road.

Necessity is likely the primary driver of the increase in doubling-up. Many of these families and children living at home may want to make the jump out on their own as soon as their economic standing improves. That could represent a strong shadow demand for housing, as well as a potential jump in household formation with a resultant boost in consumption.

You can read the blog post here.