How we lost 1.3 million households from 2008 to 2009. New Census figures show a large decrease in U.S. household count.

Preliminary Census data is now coming out showing the effects of the recession on a macro scale.  The 2008 Census figures don’t highlight the deep capital loss that was experienced by middle class families over the last two years.  We now have data showing how deep the recession has gotten.  From 2008 to 2009 the U.S. actually lost 1.3 million households.  Most would probably assume that this loss came from the vast amount of foreclosures in the market.  Although this is true and probably would reflect a slower growth rate for owner occupied households, the big drop came from those that rent in the country.  There are a variety of reasons for this to happen but first let us look at the new data figures.

The full Census report should be released in October but this is what has happened over the last two years:

us housing data census

Source:  Census

Overall, the U.S. has seen a reduction of approximately 1.3 million households while population growth is still occurring.  Yet if we look closer at the data, we will notice that renter households have fallen by 2.3 million.  The reason for this has to do with a handful of items:

-1.  Subsidies for home buying.  This has pulled demand for purchasing homes even though the economy is weak.

-2.  Renters don’t have the protection that home buyers do.  In many states renters can be evicted within one month.  We have now heard of cases of people living 12 to 24 months in a home without making a payment as long as they have a mortgage.  So the real market pain is reflected with renters on a real time basis while homeowners have added cushions from banks and government subsidies.

-3.  Renters are usually less financially able to weather an economic storm.  Of course this was much more the case before the housing bubble.  However, many households have consolidated because of the recession.  With a month to month lease, an economic change for a family can result in a quick move to find roommates.  A homeowner can’t react as quickly.

Here is the data from 2008 and 2009:
2008 census housing data

2009 census data

The amount of owner occupied housing actually increased by 1 million.  For the above reasons (i.e., Federal Reserve keeping mortgage rates artificially low, tax breaks, etc) this has pushed people to buy homes in an otherwise slower market.  But keep in mind that empty homes are still part of the real estate pool.  If you merely yank one household and pull them into another without filling the pipeline, the problems will still remain.  That is why we are seeing massive jumps in vacancy rates for commercial real estate property.  A loss of income is a loss of income no matter how you slice it.  The real concern should be on the aggregate amount of households being created and from 2008 to 2009 we lost 1.3 million households.

The rental vacancy rate is still near the peak:

rental vacancy rate

At the same time, the massive glut of housing units is still out in the market:

home vacancy rate

To put this in perspective, we added 724,000 households from 2007 to 2008.  From 2006 to 2007 we added 760,000 households.  Hard to see a recovery happening when working and middle class families are actually decreasing the amount of households while a glut of real estate is out in the market.

RSSIf you enjoyed this post click here to subscribe to a complete feed and stay up to date with today’s challenging market!

TAGS: , , , , , , , , , , ,




1 Comments on this post

Trackbacks

  1. Greenman said:

    I’m really a empathetic person but I have become a bit more than a little annoyed at these people with their blackberry’s and toys living in their homes for 2 years & not looking for steady work.
    We have work were we are but not at the spoiled rate of pay these people were used to.
    So to hell with them, let them rot in a hole with their video games and cell phones texting each other.
    I can take care of myself because i was never a spoiled bum.

    August 31st, 2010 at 2:27 pm

LEAVE A COMMENT

Subscribe Form

Subscribe to Blog


Enter your email address to receive updates from My Budget 360:

100% Private & Spam Free.


Popular – All Time

  • 1. How much does the Average American Make? Breaking Down the U.S. Household Income Numbers.

  • 2. Top 1 Percent Control 42 Percent of Financial Wealth in the U.S. – How Average Americans are Lured into Debt Servitude by Promises of Mega Wealth.

  • 3. Is college worth the money and debt? The cost of college has increased by 11x since 1980 while inflation overall has increased by 3x. Diluting education with for-profits. and saddling millions with debt.

  • 4. The Perfect $46,000 Budget: Learning to Live in California for Under $50,000.

  • 5. Family Budget: How to go Broke on $100,000 a year. Why the Middle Class has a hard time Living in Expensive Urban Areas.

  • 6. Lining up at Midnight at Wal-Mart to buy Food is part of the new Recovery. Banks offering Mattress Interest Rates. The Invisible Recovery Outside of Wall Street.

  • 7. You Cannot Afford a $350,000 Home with a $75,000 Household Income!

  • 8. Crisis of generations – younger Americans moving back home in large numbers. Student loan default rates surging largely due to for-profit college expansion.

  • 9. The next massive debt bubble to crush the economy – 10 charts examining the upcoming implosion of the student loan market. $1 trillion in student loans and defaults sharply increasing.

  • 10. Welcome to the new model of retirement. No retirement. In 1983 over 60 percent of American workers had some kind of defined-benefit plan. Today less than 20 percent have access to a plan and the majority of retired Americans largely rely on Social Security as their de facto retirement plan.
  • Categories



    wordpress stats