Nowadays, with more and more children staying home after they graduate from college, parents are wondering when their nest will be empty.

Jed Kolko, Chief Economist and VP of Analytics at Trulia (a noted real estate research firm) crunches the numbers and shares some troubling findings.

During the recession, fewer households – one or more people living under the same roof – were created than normal. Typically, 1.1 million new households are added each year in the U.S., mostly due to population growth. However, from the first quarter of 2008 to the first quarter of 2011, only 450,000 new households were created annually. Slower household growth means less demand for homes, so annual construction starts dropped during this period from a norm of 1.4 million to below 600,000. Most recently, only 521,000 households were created between the first quarter of 2012 and the first quarter of 2013.

A big part of the slowdown in household formation was due to young people living with parents or doubling up with roommates rather than setting up house on their own. Since most kids won’t live with their parents forever, these young adults represent “pent-up demand” for housing that the recovery should unleash. Problem is: the kids aren’t moving out yet.

More Than Two Million Missing Households
While other measures of the housing recovery are chugging along – like foreclosures, prices, sales, and construction – household formation is lagging. Thanks to years of below-normal household formation, the number of “missing households” has accumulated. Our early analysis of the 2013 Current Population Survey data (see note below) shows that there are still 2.4 million missing households, stubbornly close to the high of 2.6 million in 2010 and 2011. That’s equivalent to more than two years of normal household formation that have gone missing:

Year	# of “missing” households, millions
2008	0.9
2009	1.8
2010	2.6
2011	2.6
2012	2.3
2013	2.4
Note: estimate takes into account changes in the age distribution of the population. See note at end of post.