Slowdown in new households bodes ill for housing?

Dean Foust

Sara Aronchick, an economist with Goldman, Sachs & Co., released an interesting report late Wednesday that takes on the notion--popular among housing bulls--that the housing boom can continue thanks to favorable demographics. She notes that household formation – the growth rate in the number of households -- has slowed sharply in the last 30 years, to an annual average of only 1% over the last five years. That’s down from 1.5% in the 1990s, and down from 2.5% in the late 1970s.

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