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Millions of Potential New Households Waiting Out the Recovery
Many Americans moved in together as housing costs outpaced income over the last decade, resulting in fewer households; if these doubled-up households divide, housing demand will pick up, according to Zillow
- More than a third of U.S. adults were living with roommates or adult family members in 2012, up from 25.4 percent in 2000.
- Household size has risen from 1.75 adults in 2000 to 1.83 adults in 2012.
- In all, the U.S. lost 5.4 million households to doubling up.
- The most potential new households are in places where rent has skyrocketed during the housing recovery, such as some large markets in California and Florida.
Nov 3, 2014
SEATTLE, Nov. 3, 2014 /PRNewswire/ -- Stagnant incomes and rising rents left the U.S. with an unprecedented number of doubled-up households as people moved in together to make ends meet. All those roommates have changed the American housing landscape, with 5.4 million households that would exist under normal conditions instead lost in guestrooms and basements, sharing space with friends, family and roommates, waiting for better economic times, according to an analysis by Zillow.
More than a third of working adults are living in doubled-up householdsi, driving the median household size up to 1.83 adults in 2012 from 1.75 in 2000. The phenomenon is concentrated in markets where rent has most outpaced income, notably in California and Florida.
In the Riverside, Calif. metro area, under normal conditions, there would be 12.6 percent more households. In the Miami metro, more than 230,000 households – 11.3 percent more households than currently exist – were lost as people doubled up.
As the housing market becomes friendlier for buyers and the economic recovery continues, those lost households could represent a significant source of pent-up demand in the market as they begin to look for a new place to live.
"The rise in doubled-up households is a troubling sign of the times and starkly illustrates one of the prime drivers behind weak home sales these days," said Zillow® Chief Economist Dr. Stan Humphries. "But there is a silver lining behind this data. Like a coiled spring, all of these doubled-up households represent tremendous potential energy for the market. If and when these compressed households begin to unwind and these millions of Americans do start to create their own households, demand will bounce back, possibly even causing household growth to outpace population growth. That added demand will, in turn, create more incentive for builders to construct more homes, and will help unblock the market. There is no magic bullet, but continued home affordability, an increasing supply of both for-rent and for-sale homes and the potential for incomes to grow more quickly as the economy recovers will all help the market to realize this potential."
The median income of adults in doubled-up households in the U.S. has risen over time, from a median of $24,000 in 2000 to $29,000 in 2012ii, but people in doubled-up households have incomes that, increasingly, lag behind median incomes overall. On average, doubled-up adults make 76 percent of the median income of people without roommates, which means it can take longer to save up for a down payment or deposit on a place of their own.
|
Metro Area |
Share of adults doubled up households, 2000 |
Share of adults in doubled up households, 2012 |
Median Individual Income of Employed Adults Living in a Doubled Up Household, 2000 |
Median Individual Income of Employed Adults Living in a Doubled Up Household, 2012 |
Number of households gained if average number of adults per household returned to 2000 levels |
|
United States |
25.4% |
32.0% |
$24,000 |
$29,000 |
5,405,509 |
|
New York |
37.3% |
42.4% |
$28,070 |
$35,000 |
300,666 |
|
Los Angeles |
41.2% |
47.9% |
$22,000 |
$27,000 |
315,473 |
|
Chicago |
30.9% |
35.5% |
$26,300 |
$30,000 |
138,728 |
|
Dallas-Fort Worth |
25.2% |
30.7% |
$22,800 |
$28,000 |
131,555 |
|
Philadelphia |
27.9% |
35.2% |
$28,000 |
$34,000 |
114,931 |
|
Washington |
30.0% |
36.6% |
$30,000 |
$37,000 |
144,116 |
|
Miami-Fort Lauderdale |
34.7% |
44.5% |
$22,000 |
$25,000 |
232,895 |
|
Atlanta |
28.4% |
33.3% |
$25,000 |
$27,000 |
93,690 |
|
Boston |
29.0% |
33.4% |
$30,000 |
$37,000 |
56,699 |
|
San Francisco |
35.9% |
39.2% |
$30,000 |
$35,000 |
84,759 |
|
Detroit |
26.4% |
32.6% |
$27,000 |
$30,000 |
55,039 |
|
Riverside |
31.7% |
44.7% |
$22,000 |
$28,100 |
162,474 |
|
Phoenix |
26.6% |
32.9% |
$23,900 |
$29,100 |
75,197 |
|
Seattle |
22.5% |
29.3% |
$28,000 |
$32,000 |
80,078 |
|
Minneapolis-St Paul |
19.1% |
24.6% |
$28,000 |
$30,010 |
46,913 |
|
San Diego |
32.2% |
39.7% |
$24,000 |
$29,500 |
89,778 |
|
St. Louis |
21.4% |
27.5% |
$24,800 |
$28,900 |
35,085 |
|
Tampa |
22.8% |
32.1% |
$22,500 |
$27,600 |
78,387 |
|
Baltimore |
27.4% |
34.5% |
$28,000 |
$36,000 |
47,164 |
|
Denver |
22.7% |
27.6% |
$25,200 |
$30,000 |
43,548 |
|
Pittsburgh |
22.7% |
25.1% |
$23,400 |
$31,000 |
11,764 |
|
Portland |
22.3% |
29.4% |
$24,000 |
$30,000 |
46,134 |
|
Sacramento |
25.3% |
34.3% |
$25,000 |
$30,000 |
54,313 |
|
Orlando |
26.5% |
36.3% |
$22,600 |
$25,000 |
79,832 |
|
Cincinnati |
19.0% |
26.5% |
$25,000 |
$29,000 |
41,794 |
|
Cleveland |
24.1% |
28.5% |
$25,200 |
$30,000 |
7,682 |
|
Kansas City |
19.5% |
24.6% |
$25,000 |
$30,000 |
32,875 |
|
Las Vegas |
31.3% |
38.9% |
$24,000 |
$30,000 |
39,282 |
|
San Jose |
39.6% |
39.4% |
$31,000 |
$37,500 |
16,276 |
|
Columbus |
19.1% |
25.8% |
$25,000 |
$28,100 |
45,577 |
|
Charlotte |
23.4% |
29.3% |
$23,300 |
$26,000 |
26,332 |
|
Indianapolis |
18.9% |
26.1% |
$25,000 |
$29,000 |
31,196 |
About Zillow:
Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgages, Zillow Rentals, Zillow Digs®, Postlets®, Diverse Solutions®, Agentfolio®, Mortech®, HotPads™, StreetEasy® and Retsly™. The company is headquartered in Seattle.
Zillow.com, Zillow, Postlets, Mortech, Diverse Solutions, StreetEasy, Agentfolio and Digs are registered trademarks of Zillow, Inc. HotPads and Retsly are trademarks of Zillow, Inc.
i Zillow defined a doubled-up household as one in which at least two working-age (23-65), unmarried or un-partnered adults live together. Data obtained from U.S. Census Bureau.
ii Median household income was computed using the latest available data from the U.S. Census Bureau.
SOURCE Zillow, Inc.
For further information: Emily Heffter, Zillow, 206-757-2701 or press@zillow.com