The Mortgage Bankers Association reported that 1.2 million households were lost from 2005 to 2008, despite a population increase of 3.4 million. The decline in households has likely contributed to the excess supply of apartments and single family homes on the market. Household formation should pick up once the job market stabilizes. Young adults need a paycheck and a sense that they will have sustainable employment before living on their own.
This trend can also have some opportunities. Young adults may have extra spending money without having to be responsible for necessities. This will also help to boost the recovery because when things look more optimistic, there will be a pent up demand for more housing and all the needed household items.