By Dees Stribling | MHN Online
Household formation is an important driver of not only the residential real estate market, but also the wider economy, and it took quite a hit during the recession. According to Federal Reserve Bank of Cleveland, compared to the previous 10 years, the growth rate in the number of U.S. households was cut by two-thirds between 2007 and 2010. This slowing in household formation reflected the overall weak economy, but it has also meant a weak housing market, as lower household formation rates reduce housing demand, especially in the for-sale segment. The sluggish rate of household formation wasn’t the only drag on the residential market, but it was an important one. Things got better in the year after 2010, but nothing that could be called robust.
