Household Formations

Robert Wetenhall: OK, fine, call it "love" if you must, but that a volatile and non-quantifiable data point, whereas household formations are easily quantifiable on your computer screen, according to Bloomberg. See, here a graph showing how they have jumped to an almost 10-year high: Sure, falling in love may only be a minor variable causing young people to leave their parents' home and form a new household. We're talking, of course, about what economists call household formations. Perhaps more important are labor and credit trends that are allowing millennials a greater chance to take advantage of still-low mortgage rates. RBC Robert Wetenhall and colleagues raised their forecasts for housing starts to 1.1 million this year, 1.2 million next year and 1.25 million in 2017. The drop in the unemployment rate to 5.6 percent among 25- to 34-year-olds, from almost twice that level during the recession, along with easing credit standards and rising rental prices caused analysts at RBC Capital Markets to make a bullish call on homebuilders today. (news.financializer.com). As reported in the news.