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The "Household Conundrum"

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by Calculated Risk on 11/19/2021 07:26:00 PM

Today, in the Real Estate Newsletter: The “Household Conundrum”

Excerpt:

Housing economist Tom Lawler discusses the “household conundrum” – why it is unclear how many households there are in the U.S..

One of the challenges facing housing analysts in trying to assess the current and future state of the US housing market is the lack of timely and reliable estimates of the number of and characteristics of US households. This challenge has become even more acute since the onset of the pandemic, as significant declines in response rates to government surveys of households have adversely affected the accuracy of already imperfect household estimates. The lack of reliable household data makes it difficult to assess how much of the astonishing strength in the housing market since the middle of last year has been related to “demographics,” as opposed to behavioral and preference changes associated with the pandemic and, more recently, the surge in investor purchases of single-family homes.

While HVS household estimates have always been volatile (partly related to the small sample size of the CPS), and have not matched decennial Census results, the estimates produced since the onset of the pandemic have been … well … ridiculous. Below is a table of the HVS estimates of total and owner-occupied households.

As the table indicates, the number of households estimated from the HVS exploded upward following the onset of the pandemic, and the number of owner-occupied households rose by an astonishing and completely unbelievable amount. And following that surge the HVS estimates of total households fell, and the number of owner-occupied households plummeted!

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