There were 357,000 new households created between March 2009 and March 2010, down from about 1.3 million per year between 2002 and 2007, according to U.S. Census Bureau data.
With household formation at a 63-year low, the supply of homes on the market is nearing a record high. "When people are afraid of losing their jobs or not being able to get into the job market, they are not thinking about buying a home," explains NATIONAL ASSOCIATION OF REALTORS ® spokesman Lucien Salvant. "Many opt to stay at home with parents, or to share rentals with friends."
The Census Bureau reports a 14.5 percent gross vacancy rate in the nation's housing at the close of the second quarter. Normally, demand for replacement homes and second homes, a jump in new households, and nonresidential to residential conversions mean approximately 1.7 million new units are needed each year to satisfy demand. Foreclosures alone are not responsible for the housing glut, with experts pointing out that household formation has fallen along with immigration and marriage rates.
Source: Philadelphia Inquirer, Alan Heavens (10/12/10) and Realtor Mag