Household formation lags as young adults move back home

11/17/2011 | New York Times (tiered subscription model), The

More recent college graduates are moving in with their parents to save money, and the trend is slowing a driver of the economy -- the creation of new households. Generally, the formation of a new household has a $145,000 economic impact, one economist said. The lack of activity is also holding back the housing market. "If these pent-up households were to form, then the oversupply of housing would be largely absorbed and housing construction would quickly ramp up," said Mark Zandi, chief economist with Moody's Analytics.

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