---
title: Stay Focused on Household Formation, Not Housing Starts
description: While a general slowdown in home construction and sales has set over the past several months, the numbers for household formations remain robust and encouraging for companies that make and sell products for households.
image: https://blog.dallasmarketcenter.com/hubfs/Household-formation_blog.jpg
---

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# Stay Focused on Household Formation, Not Housing Starts

Posted by [Dallas Market Center](https://blog.dallasmarketcenter.com/author/dallas-market-center) on December 5, 2018

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The statistic that The Atlantic magazine called “the most overlooked statistic in economics” is once again providing the industry a much more relevant – and upbeat – portrayal of the housing market – as least as it relates to lighting products and other home furnishings.

While a general slowdown in home construction and sales has set over the past several months, spooking both the stock market and the overall economy, the numbers for household formations remain robust and encouraging for companies that make and sell products for households.

As has been pointed out in LightSource previously, the attention-getting reports on home sales, housing starts and other similar statistics are really important for the construction industry. They also have relevancy for home builders and the retailers who sell them.

But for the home furnishings business, it is household formation that is more meaningful. This is a monthly government statistic that measures the number of households created during the period. This is critical as it is these households that are buying the basic furnishings products – be it furniture, rugs, frying pans, towels or lighting – needed to furnish the space.

For the most recent month charted, September, the number of new households created was the second highest in the past three years, at 2.29 million. By way of comparison, that’s nearly four times as many formations as a year ago.

This continues a year-long streak that has seen impressive year-over-year gains in the formation numbers. And that’s good news for home furnishings companies.

Proving once again that to get a true picture of economic indicators as they impact specific industry sectors like lighting, you need to go beyond just the general headlines.

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