NAA Industry Insider: 'Missing Households' Represent Big Source of Pent-Up Demand

A recent analysis by Trulia chief economist Jed Kolko found that household formation, especially among young adults age 18 to 34, trails historical norms. However, he predicts the metric will bounce back slowly in the years to come. Prior to the housing bust, an average of 1.1 million households -- defined as one or more people who live in the same home -- were formed each year throughout the United States. During the bust period spanning the first quarter of 2008 through the first quarter of 2011, only about 450,000 households formed each year. That helped create an estimated backlog of 2.4 million households that should be factored into forecasts for the coming years, according to Kolko's research.

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