US household formation late last year seen slowing further

Bloomberg

High inflation, rising interest rates and increased economic uncertainty may be telegraphing a further slowdown in US new household formation during the closing months of 2022.
A slowdown in home sales due to high mortgage rates, coupled with the latest figures from RealPage Market Analytics that show a sharp decline in apartment demand — the first since 2009 — point toward fewer households being created.
“Demand for new leases all but evaporated due to low consumer confidence and high inflation,” said Jay Parsons, economist at RealPage Market Analytics, a rental market intelligence platform. “We’ve never before seen a period like this – weak demand for all types of housing despite robust job growth and sizable wage gains.”
Census Bureau data show that more than 1.2 million new households were created on average in the July-September period, the fewest in a year. Fourth-quarter figures are scheduled for release on Jan. 31.
Sluggish household formation risks weighing on discretionary consumer spending, particularly for furniture and other household items. At the same time, a slowdown in demand could help to further cool the pace of inflation. A Federal Reserve Bank of New York survey released Monday found that the fewest Americans anticipate changing their primary residence over the next 12 months since the survey started in mid-2013.
Economic concerns also risk restraining household formation further. While consumer sentiment improved more than expected in early January, as concerns over inflation and an upcoming recession have been lowered, uncertainty remains high.