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Tuesday, April 05, 2016

Goldman: "Household Formation Close to Normal"

by Calculated Risk on 4/05/2016 08:01:00 PM

• Early: Reis Q1 2016 Mall Survey of rents and vacancy rates.

• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 2:00 PM, The Fed will release the FOMC Minutes for the Meeting of March 15-16, 2016

A few excerpts from a note by Goldman Sachs economists Hui Shan and Daan Struyven: Household Formation Close to Normal

Looking across various measures, we find that household formation has improved over the past few years and likely exceeded 1 million in 2015—an encouraging rebound from the subdued pace in years prior.

We continue to forecast an annual household formation rate of 1.2 million over the next few years. This forecast, coupled with the decline in the vacancy rate, supports our constructive view on homebuilding. Overall, we see continued evidence that housing will remain a tailwind to the economy.