During and after the Great Recession, a huge number of young adults facing economic hardship never left their parents’ home or even moved back into their parents’ homes.
Now, that trend may be turning around.
Deutsche Bank chief international economist Torsten Sløk circulated a chart showing a huge spike in household formation over the last several months. This indicates that more people are going out and moving into their own apartments or houses.
Sløk observed that, while the core causes of the jump in housing demand are somewhat unclear:
“Our best guess is that the jump in household formation is driven by accelerating job growth, lower oil prices, and higher consumer confidence, including for the Millennials. Altogether these forces have pushed up confidence in the housing market.”
The increase of nearly two million new households is pretty dramatic in the chart: