The deep effects of the Great Recession and the need for many families across the country to consolidate debt and save money can be seen in a new report from the Mortgage Bankers Association that shows the number of householdsdeclined from 2005-2008 despite a population increase.
The report, titled What Happens to Household Formation in a Recession, found that the number of households across the country declined by 1.2 million from 2005 to 2008, despite a population increase of 3.4 million.
The study, which was conducted by University of Southern California associate professor Gary Painter and sponsored by the Research Institute for Housing America, also found that the national home-ownership rate had fallen to 67 percent from a peak of 69 percent.
"With such a significant drop in households nationwide, it is clear the most recent recession impacted individuals decisions to move out on their own and caused many Americans to join already formed households, said Painter. "…Clearly, given the depth of the downturn in 2009, and the ongoing weakness in the job market through the beginning of this year, this study gives no reason to expect that household formation has picked up at all."
The decline in households and needs by many to save money during the recession also led to an increase in overcrowding, which increased nearly five-fold and indicated that families had taken to sharing households.