'Doubling up' leading to growing housing inventory

The nation's housing inventory is nearing all-time highs because many more people are moving in with family once they've lost their home, rather than buying a new home and forming their own household.

Data from the Census Bureau shows that household formations have slowed to a rate not seen since 1947. Between March 2009 and 2010, 357,000 households were formed in the country, while 398,000 were formed during the previous 12 months. That latter figure represented the third-smallest rate of growth since 1947 and was substantially off-pace from growth rates earlier this decade, when the country averaged 1.3 million new households a year.

The change came because many people are losing their homes to foreclosure and moving in with family while they work to get back on their feet. With so many people adding homes to the market and not buying a new one to offset that, inventory has skyrocketed.

"When people are afraid of losing their jobs or not being able to get into the job market, they are not thinking about buying a home," Lucien Salvant, of the National Association of Realtors, told the Philadelphia Inquirer. "Many opt to stay at home with parents, or to share rentals with friends."

The Chicago Tribune reports that sociologists refer to it as the "boomerang effect," when older Americans are moving back in with their families after financial struggles.
 

More News