Household Size Rises for First Time Since 1850

For the first time in 160 years, the number of people in the average U.S. household has risen. According to Census Bureau data analyzed by Pew Research, this marginal bump in household size bucks a century-and-a-half-long trend of shrinking household size.

In 2018, average household size rose to 2.63 people per household, up from 2.58 people in 2010. Household size is increasing as population growth trails new household formation. The population within a household has grown 6% since 2010, while household formation has grown 4%, the Census Bureau indicates.

Pew points to two key reasons for the demographic shift.

For one, a growing share of the U.S. population lives in a multi-generation household, accounting for about 20% of households today, up from 12% in 1980. Asian, black and Hispanic households are more likely to live in such arrangements than non-Hispanic white households.

Secondly, many households added or retained an extra adult after the last economic downturn. These extra adults are often a parent or child of the primary occupant, or a roommate or boarder who cuts down on cost of living. Such arrangements account for 20% of households in 2019, up from 17% in 2007.

In addition to implications on economic growth, these demographic changes could impact residential real estate.

According to RealPage analysis of more than 8 million individual lease transactions, single-occupant apartment renter households still outnumber multi-occupant units. In other words, there are more single people living in apartments than there are roommates, couples or families in apartments.

RealPage’s analysis found that eight types of households make up the majority of the apartment renter base. Of the multi-occupant apartment households, there are four primary groups found to have several commonalities. Those household types are defined as:

• Roommates by Necessity: These renters are most prevalent in expensive coastal markets, particularly in California. It’s the second largest cluster of the eight main groups and the second youngest with a median age of about 28.
• Young Couples/Roommates by Choice: This affluent set doesn’t spend a meaningful chunk of income on rent. They are often pet owners and typically live near their jobs, translating to a mix of urban core and high-end suburban locations.
• Families: Because this cohort includes children, these renters gravitate toward the suburbs. Their stated incomes don’t suggest a high level of disposable income after paying rent. This accounts for the largest household size at four people per household, on average.
• Established Married Couples: Considering this is the most financially stable cohort, it is also the smallest. Established married couples tend to pool in retirement centers and don’t spend much of their incomes on rent.

In addition to these multi-person households, RealPage categorizes renters into four single-occupant households: Starting Out Singles, Affluent Singles, Mature Singles and Still Cash-Strapped Singles. These groups include people living alone at various income levels and ages. In total, these singles account for about 63% of all leases.

Meanwhile, about 37% of leases come from the four multi-person household cohorts. These households have, on average, two people living in them, except for the Families category, which averages four people per household. Though the breakdown of these categories has evolved from recent years, it has not greatly changed.