U.S. Household Formation Weakens to Slowest Pace in Seven YearsBy
The number of occupied housing units in the U.S., a measure used to track household formation, rose by just 0.3 percent in the year through September, marking the slowest rate of growth since 2010.
The main culprit was a 0.8 percent drop in the number of renter-occupied units, based on Census Bureau figures released Tuesday. The number of owner-occupied units rose 1 percent, decelerating from the 1.7 percent pace of growth logged in the four quarters through June.
Renter-occupied housing has been on the rise since the 2008-09 recession, consistently outpacing growth in owner-occupied housing. That pattern has marked a departure from the historical norm, but finally reversed earlier this year, as owner-occupied units began growing at a faster clip than rental-occupied units once again.
High rental inflation and a tightening labor market may be starting to shift the calculus in favor of homeownership, but so far, the switch hasn’t been happening quickly enough to prevent a slide in the overall rate of household formation.