uploads///MR household formation

Why household formation drives homebuilder demand (Part 1)

By

Nov. 20 2020, Updated 3:30 p.m. ET

Low household formation numbers over the past five years will drive homebuilder demand going forward

Since the financial crisis began, demand for new construction has fallen, as household formation numbers have dropped. The low household formation numbers have been driven by a poor economy—not by demographics. This represents pent-up demand that must be satisfied in the future.

This series will discuss household formation numbers historically and over the past few years. We’ll compare those numbers with housing starts and show that there’s tremendous pent-up demand for housing, which will drive homebuilder earnings for years to come. We’ll explore the following considerations.

  • The state of the first-time homebuyer (Part 2)Why household formation drives homebuilder demand (Part 2)
  • Household formation numbers (Part 3)
  • Housing starts (Part 4)
  • Implications for homebuilders (Part 5)

The state of the first-time homebuyer

This analysis continues in The state of the first-time homebuyer (Part 2)Why household formation drives homebuilder demand (Part 2).

Article continues below advertisement
Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.