Americans are feeling increasingly confident in the future and more and more are striking out to set up their own homes, a move that is helping propel the housing recovery. The deep financial crisis and recession of 2007-2009 kept many Americans from leaving their parents' nests and drove others back into them, putting a sharp brake on the pace at which new households formed. Household growth averaged about 500,000 per year from 2008 through 2010 - less than half the rate seen at the height of the housing boom in the years just before that. The pace in 2010 was the weakest since 1947. But the rate at which individuals or families are getting their own homes picked up over the past two years, underpinned by a steady if tepid economic recovery and gradual labor market gains. In 2011, households increased 1.1 million and they grew closer to 1.2 million last year. 'The rise in household formation bodes well for the housing recovery. Housing has turned from the economy's sorest spot to its brightest, with new building activity at 4-1/2-year highs.
As demand picks up, builders are facing lot shortages and the challenge of finding new lots to support increased building. Builders are now 'running to catch up.' The shortages of lots are driving up prices. In some areas, lot prices are soaring higher than in others. For example, lots are about 25 percent higher in parts of North Carolina, 30 percent higher in Phoenix, and 15 percent higher in Denver and Orange County, Calif.
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