The “dramatic shift” in the family’s make-up is likely to have “big implications” for 2023

by calculated risks 11/22/2020 09:17:00 AM

Today, in the Real Estate Bulletin Calculated Risk: Lawler: ‘Dramatic shift’ in family formation likely to have ‘significant implications’ for 2023

Brief excerpt:

Below is a chart showing CPS/ASEC estimates for the proportion of people ages 25-34 who live alone.

According to CPS/ASEC estimates, the share of adults (18+) living alone jumped to 14.9% in March 2022 from 14.4% in March 2021, and the share of households with only one person increased to 28.9% from 28.2%. Both measures of “living alone” (population ratio and share of households) were at the highest levels ever recorded by CPS/ASEC. The jump in single-person households was the main reason why the average family size as measured by CPS/ASEC fell to 2.50 in March 2022 (the lowest level ever recorded) from 2.54 in March 2021. (Not specified, the average decreased The family size is 0341. With regard to the share of total households, the per capita share increased more for young people (up to 39 years old) and for young people between the ages of 65 and 74 years. …

% of 25-34 years old live alone… There is strong reason to believe that household growth is no longer getting a ‘push’ from behavioral changes as suggested from March 2021 to March 2021. If that turns out to be true, then household growth will revert or will revert to growth more consistent with underlying population changes by age group, a development that would mean household growth over the next year by about half that apparently occurred from early 2021 to early 2022. This dramatic shift has major implications for projections for rent growth and home price growth next year.

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