As the U.S. homeownership rate continues to dwell near its lowest level in two decades, a new study from Zillow suggests more than five million additional households are waiting in the wings to step into the market as the economic recovery trudges forward.
According to a report released on Monday, an estimated 32 percent of adults living in the United States were living with roommates or other adult family members in 2012. That compares to just 25.4 percent as recently at 2000. With that rise, Zillow says the median household size has climbed to 1.83 adults from 1.75 in 2000.
A major part of that decline comes from stagnating wages, which came to a median $29,000 in doubled-up households in 2012. On average, Zillow says doubled-up adults make about 76 percent of the median income of people living without roommates, making it more difficult for those Americans to save up money for initial housing costs.
In all, the country has lost an estimated 5.4 million potential households to the "doubling up" phenomenon, many of which are now waiting for the economy to get a point where they can strike out on their own.
"The rise in doubled-up households is a troubling sign of the times and starkly illustrates one of the prime drivers behind weak home sales these days," Zillow Chief Economist Dr. Stan Humphries said. "But there is a silver lining behind this data. Like a coiled spring, all of these doubled-up households represent tremendous potential energy for the market."
Once the nation does get to a point where would-be homeowners are able to clear the economic hurdles to homeownership, Humphries predicts demand could bounce back so much that household growth could outpace population growth.
With that added demand, homebuilders will have incentive to construct more homes, helping to boost the nation's slowly improving stock of for-sale homes.
"There is no magic bullet, but continued home affordability, an increasing supply of both for-rent and for-sale homes and the potential for incomes to grow more quickly as the economy recovers will all help the market to realize this potential," Humphries said.
According to Zillow's data, the greatest potential lies in markets where rental costs have far outpaced home price growth throughout the housing recovery of the last few years, particularly in some of the largest markets in California and Florida.
For example, in California's Riverside metro, where the number of doubled-up adults has surged from 31.7 percent in 2000 to 44.7 percent in 2012, Zillow estimates there would be 12.6 percent more households under normal economic conditions.
Also high on the list of markets with potential is Miami, which Zillow says lost more than 230,000 households—11.3 percent more than there currently are in the area—as adults moved in together.