Pent-Up Housing Demand: Number of “Shared Households” Grew from 2007 to 2010

Earlier this month, the Census Bureau published  a report examining “household sharing,” which is the situation in which people join or combine households. While the report does not examine the causes of household sharing, it is widely accepted that the housing crisis and the economic impacts of the Great Recession have led many individuals to share housing in order to save money.

Household sharing has slowed the growth of total household formations, thereby leading to pent-up housing demand under the theory that many forms of household sharing are untenable over the long-run. As economic conditions improve, this pent-up housing demand will be unlocked, increasing the need for rental and owner-occupied housing.

The Census data look at the period covering 2007 through 2010. The Census defines a shared household as any “household which includes at least one ‘additional adult,’ who is a person aged 18 or older who is not enrolled in school and who is neither the householder, the spouse, nor the cohabitating partner of the householder.”

According to the data, the number of households rose from 116 million in 2007 to 117.5 million in 2010. It should be noted that this increase represents a historically small amount of household growth (over the last 30 years, according to the Current Population Survey, the net increase in households has averaged about 1.2 million per year).

The components within that total are even more telling. The total number of traditional, not-shared households fell by more than 700,000 (0.9%). In contrast, the number of shared households rose by almost 2.3 million (12.1%).

In the spring of 2007, 27.7% of adults lived in shared households. By the spring of 2010, that percentage had risen to 30.1%.

Perhaps surprising, the increase in shared households was not concentrated among the youngest of adults. The number of people aged 18 to 24 who were classified as an “additional adult” rose 5.9% over the 2007 through 2010 period. For those aged 25 to 34, the increase was even higher – 18.1%, or 45% of the total increase in shared households. For those aged 35 to 65, there was a still significant 9.7% increase in additional adults.

Those moving in with relatives accounted for 68% of the increase, making moving in with family members the most common occurrence. And adult children moving back in with their parents accounted for 46% of the increase, making that the most common specific event.