By Margaret Kelly
The economy has seen a lot of bright spots this year, and housing has definitely been one of them. As markets around the country continue to stabilize and prices recover, there’s more good news on the horizon: Household formation is on the rise again.
According to the U.S. Census Bureau’s recent Housing Vacancy Survey, annual household formations between 2000 and 2005 averaged nearly 1.4 million. By 2008, that number fell to slightly above 400,000.
But in 2012, the most recent year for which numbers are available, annual household growth bounced back, reaching nearly 1 million. This clearly shows a positive trend that mirrors the recovery of housing and the economy in general.
What does this mean? For starters, it indicates more people are recovering financially from the downturn and may be setting their sights on homeownership. College graduates who couldn’t find jobs and had to move back in with mom and dad are finally setting out on their own. Couples who lost jobs—or took a hit when one spouse suffered a pay cut—are finding new, better-paying jobs and the confidence to consider buying again.
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