After years of wondering if Millennials would ever buy homes, household formation is finally rising in line population growth, driven largely by Millennials.
Forbes reports that the older cohort of Millennials, born between 1980 and 1989, “by themselves account for 26% of all home purchases. The older Millennials, now in their thirties, have started having children and are showing an increasing desire to own a home.”
Growth in the number of households had been as low as 534,000 back in 2009, during the recession, but now it is again well over 1 million. The various sources of data on household formations show that we are now up to somewhere between 1.2 million and 1.5 million per year.
A new study by the Harvard Joint Center for Housing studies notes that the rate of household formation is now finally rising in line with population growth, with annual gains of nearly 200,000 on average since 2015. Up until recently, the rate of household growth has been running at half the rate one would have expected based upon the rate of population growth.