By Nathalie Voit

 

U.S. household growth sank to its lowest numbers in decades, according to a Pew Research Center analysis of 2020 census data.

 

The 2020 census recorded 126.8 million occupied U.S. households, a 9% growth increase from the 116.7 million households recorded in the 2010 census. The single-digit growth rate of the past decade was lower than the prior record low numbers (11%) recorded in the 2010 census and lower than at any time since at least 1860, Pew reported.

 

The previous decade added just over 10 million households, less than in any decade from 1950 to 2010. Pew noted that when the adult population was significantly smaller, like in the 1970s, 16.9 million households were added.

 

The country’s suboptimal household growth stems from several long-term demographic trends. A primary driver of household growth is population growth. The population living in households increased by only 7.5% since 2010, the slowest recorded growth since the 1930s.

 

A second demographic trend has also contributed to declining household growth: the rise of multigenerational family living. Multigeneration family living is a living arrangement composed of two or more adult generations living under the same roof, according to the U.S. Census Bureau. In 2016, one-fifth of the U.S. population lived in multigenerational family households, eight percentage points greater than in 1980, Pew reported.

 

Another factor has been the general trend of fast-growing immigrant groups to live with their families, partly because adults in those groups tend to be much younger. For example, Asian and Hispanic adults are less likely to live by themselves than black and white adults.

 

“In 2020, there were 42.2 households for every 100 Hispanic adults and 41.9 households for every 100 Asian adults. White (53.3 households per 100 adults) and Black adults (55.0 households per 100 adults) were more likely to live in separate households,” Pew reported.

 

An additional factor contributing to slowed household growth is the changing preferences of American adults. For most of the 20th century, adults had been gradually living alone. The trend has slowly reversed since the turn of the 21st century. The share of older adults living alone peaked at one in three (32%) in the mid-1990s and has since declined to 27% as of 2020. Adults 65 and over are the most likely age group to live by themselves. Still, “adults in most age groups are less likely than a decade ago to live in their own households,” Pew noted.

 

Aside from demographic trends, some geographic trends influence the rates of household growth. One major trend is urbanization and the tendency for people to migrate to cities from rural areas. Urbanization has picked up pace since 2010 when 16% of American adults lived in rural areas. In 2020, the number downgraded to 14%. People in rural areas are more likely to live in their own households (54.9 households per 100 adults) than adults in urban areas (50.2 households per 100 adults), Pew reports.

 

Soaring housing costs are also dampening the prospects of obtaining a home for many. Rent costs have outpaced the rate of inflation in general. The Consumer Price Index (CPI) from 2010 to 2020 for rent of primary residence increased 37%, compared with an increase of 13% for the all-items CPI Index. Meanwhile, home prices have nearly doubled since 2000, according to the Case-Schiller national home price index.

 

Moreover, the average household size has decreased from 2.58 in 2010 to 2.55 in 2020, according to Pew.

 

The lagging growth rates carry indirect implications for the broader economy.

 

“The slowdown in economic growth over the 2010s is partly a reflection of weak household formation and low levels of home building,” Pew reported.