Household Sharing and its affect on the Market.

CHART OF THE DAY: There's A Massive Source Of Pent-Up Demand In The US Housing Market
 


 

The financial crisis and housing bust came with kids moving back in with their parents and parent moving back in with their kids.  In many cases, kids just never moved out.

UBS's top economist Maury Harris has argued for a while that the rise in shared households represented pent-up demand, which could eventually acted as a bullish force in the housing market.

"Households' further venting of delayed, pent-up demand has been a key theme underlying our 50 basis points above-consensus forecast of 3% calendar average 2014 real GDP growth," wrote Harris in a research note to clients. "In 2013 a lower personal saving rate, renewed household borrowing, accelerating consumer durable goods spending growth and improved home sales were consistent with pent-up demand venting."

He noted that the latest data from the Census Bureau showed a deceleration in household formation in Q3.

But longer-term, he's confident that shared households will continue to fall as a percentage of total households.

"Looking ahead, the extent of "doubling up" usually remains critical for household formation," wrote Harris. "In 2014 and 2015 we expect further declines in the still relatively percent of households that are shared residences as unemployment rates for young adults continue to decrease."

"We see the unemployment rate, which stood at 7.3% in Q313, declining to 6.4% by Q414, with downside risks."

 

cotd shared households

 

Read more: http://www.businessinsider.com/shared-us-household-rate-falling-2014-1#ixzz2pvrO0PKo

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s