Census Stats: Household Size on the Upswing

By PlanetLaundry staff | May 21, 2010

The number of people living under one roof is growing for the first time in more than a century, a fall out of the recession that could reduce demand for housing and slow the recovery.

The Census Bureau had projected the average household size would continue to fall to 2.53 this year. Instead, the average is likely to hit 2.63, a small but significant increase because it is a turnabout.

"A funny thing happened on the way to the future," said Arthur C. Nelson, director of the Metropolitan Research Center at the University of Utah. "Household size increased."

The U.S. could end this year with up to 4 million excess housing units because of the reversal in household size, he said. A key factor: "The Great Recession has forced doubling up among both family and non-family members," Nelson explained.

Multi-generational households are on the rise: 49 million, or 16 percent of the population, live in a home that had at least two adult generations in 2008. In 1980, there were 28 million, or 12 percent of the population. According to a recent Pew Research Center report, the growth is due to demographics, cultural shifts and high unemployment.

"I think it's the young adults," said Dowell Myers, housing demographer at the University of Southern California. "Residential mobility has slowed down and when it slows down, they're back in their parents' houses or living with roommates."

Household size began inching up in 2005, before the recession, a trend that might have been driven by the real estate boom that made housing unaffordable to many. Now, it's more likely to be caused by the poor economy.

"There are a lot of trends going on," Nelson said. Among them:

• Older Americans. They're moving in with children and grandchildren, and vice versa. About 20 percent of people 65 and older live in multi-generational households

• High unemployment. It's keeping young adults out of the job market and back home with their parents.

"Clearly, a lot of people are not forming households when they're getting out of school," said Karl Case, economics professor at Wellesley College, who helped create the Standard & Poor's/Case-Shiller Home Price Index.

It's not just that people are not buying homes. They're not renting either, a sign that more people are squeezing into one unit. "I can document this with my own students," Case said. "Rental vacancy is the highest it's ever been."

• Immigrants. They have higher fertility rates and a cultural acceptance of extended families living together. Despite a decline in the influx of Hispanics since the economy soured, household size inched up. "It's going to have huge implications for the housing market," Nelson said.

If it lasts. Many economists and demographers are convinced that as soon as the recession ends and jobs open up, Americans will return to their old ways. "I see it as temporary," Myers said.