I learned about a new economic statistic in yesterday's WSJ: missing households. Young people make choices about living arrangements, whether to be on their own, have a roommate, or continue to live with their parents or other relatives. One can calculate how many households we would have if every person or family lived in their own housing unit. Compare this to the actual number of households and you get an estimate of the number of missing households.
As the economy started to go downhill in 2008, there were 900k missing households. By 2011 the number peaked at 2.6m. It is now down slightly to 2.4m. Most of those in missing households are between the ages of 18 and 34.
One does not have to do a lot of fancy economic modelling to infer that a good chunk of these 2.4m people are not staying in their parents' house by choice. This is a further reflection of the truly difficult labor market that we face today. It also suggests that we are not going to have a serious recovery in housing until the labor market gets better.
Dow hits 20,000
3 months ago