1 of 2. New housing construction is seen in Darnestown, Maryland, October 23, 2012.

WASHINGTON | Fri Jan 18, 2013 1:07am EST

WASHINGTON (Reuters) - 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. Instead of having too many houses, we are turning to a situation where there aren't enough," said Guy Berger a U.S. economist at RBS in Stamford, Connecticut.

Indeed, housing has turned from the economy's sorest spot to its brightest, with new building activity at 4-1/2-year highs. Housing activity in turn spurs related areas like furniture.

That is because of people like Linna Chhean. After graduating from college in May 2007, she moved back in with her parents, helping out in a family-run business.

The 27-year-old finally moved into her own one-bedroom apartment four weeks ago after she was hired as a designer in the Dallas offices of a global public relations firm.

"I wanted to get a job in my field, which is art. I was working for them in a convenience store, which is not what I wanted to do at all," said Chhean.

BRIGHTENING PROSPECTS

The worst recession since the Great Depression of the 1930s cost the economy 8.8 million jobs and drove the unemployment rate up to 10 percent.

Dim job prospects and growing financial stress undercut the pace of household formation - a central force behind housing demand - even though the population kept growing at a rate of about 2.7 million per year.

Republican vice presidential candidate Paul Ryan seized on the dashed hopes of young Americans in bashing President Barack Obama's policies at the Republican national convention in August.

"College graduates should not have to live out their 20s in their childhood bedrooms, staring up at fading Obama posters and wondering when they can move out and get going with life," he said.

An analysis by economist Timothy Dunne at the Cleveland Federal Reserve Bank found there was a shortfall of 2.6 million households from 2008 through 2011 compared to what pre-recession trends would have suggested.

Younger adults between the ages of 18 and 34 accounted for almost three quarters of this gap; the number of people in this age cohort living with their parents increased by 2 million between 2007 and 2011.

But the tide appears to be turning.

Last August, Edward Kennedy, 22, moved into his own apartment in Bridgeport, Connecticut, after landing a job at Sacred Heart University's undergraduate admissions office.

"I moved home after graduating in May 2012. It seemed like the best idea to save some money," said Kennedy. "I plan on getting my MBA over the next year and a half, while working at the university."

He said more and more of his peers were likewise setting out on their own.

HOUSEHOLD GROWTH BOOSTS RENTAL MARKET

The gains are being felt primarily in the rental market, where rising demand has spurred a sharp pick up in construction of apartment buildings. In contrast, the U.S. homeownership rate hasn't risen much from a 15-year low reached in early 2012.

"We are going to see more recovery in the rental market, in the very short run. As the market improves, people will start to face higher rents and over time, that will spill over into the owner-occupied market," said Gary Painter, a public policy professor at the University of Southern California.

New home completions have lagged the increase in household formation, leading to a tightening supply.

According to RBS' Berger, more than 1.3 million new residential structures should have been completed last year to keep pace with household growth. But only 651,400 homes were finished, the second lowest on record.

"Given that the stock of homes available for sale is already very low, inventories alone are unlikely to meet the demand presented by these new households," said Berger.

A monthly survey conducted by the National Association of Home Builders shows that growing demand and tightening supply have pushed homebuilder sentiment up to a near seven-year high.

NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Florida, said builders were now gearing up, unperturbed by the possibility that banks could dump an increasing number of foreclosed homes onto the market as conditions improve.

"Even if we have a wall of supply coming in, we will have a wall of demand to balance it," he said.

Rutenberg estimated 916,000 new residential projects would be started this year, compared to 780,000 in 2012. And Rutenberg expects rising demand to keep builders busy for years to come.

He said new construction would satisfy about 46 percent of the demand for single-family homes this year, and 83 percent of the demand for apartment buildings over the next 10 years.

Although home building accounts for only about 2.5 percent of U.S. gross domestic product, economists believe the turnaround in the housing market has just enough momentum to take over the baton from manufacturing as a driver of growth.

Economists estimate that for every new single family home constructed, at least three permanent jobs are created. There is also a boost through demand for items ranging from furniture to paints.

"Housing will take a leading role. We anticipate that (inflation-adjusted) residential investment will grow 22 percent this year, the fastest since the early 1980s," economists at JPMorgan wrote in a research note.

They estimate homebuilding could add around 0.5 of a percentage point to economic growth this year.

(Reporting by Lucia Mutikani; Editing by Tim Ahmann and Tim Dobbyn)

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1 of 2. Research in Motion (RIM) BlackBerry smartphone handsets are pictured in this illustration picture taken in Lavigny, Switzerland in this July 21, 2012 file photo.

TORONTO | Thu Sep 27, 2012 9:17pm EDT

TORONTO (Reuters) - Research In Motion Ltd reported a narrower-than-expected loss on Thursday and the struggling BlackBerry maker bolstered its cash reserves, sparking optimism ahead of the launch of its make-or-break line of next-generation smartphones.

Shares of RIM surged 20 percent in after-hours trade on indications the company will have plenty of cash to ramp up production of its new BlackBerry 10 devices and mount a robust marketing campaign for the revamped line, due in early 2013.

It was the biggest jump for the stock since a 50 percent surge in December 2003, underlining the importance of the BB10 launch. The company, which has fallen far behind its rivals in a smartphone market it once dominated, has staked its future on the BB10 and its completely redesigned operating system.

RIM's second fiscal quarter brought shareholders additional glimmers of hope, a break from a succession of dreadful quarterly reports. The company not only generated more revenue than Wall Street had forecast but it topped expectations on the number of devices shipped in the period, which ended on September 1.

"It's very impressive," said Jefferies & Co analyst Peter Misek. "I didn't expect they could execute on the business given the models they have in the market, but they obviously did really well in emerging markets."

RIM was also able to bolster its cash pile by collecting on cash owed to the company, drawing down inventories and cutting costs.

ONE-TIME PIONEER

A one-time smartphone pioneer, RIM has failed to keep pace with rivals such as Apple Inc and Samsung Electronics Co, and its stock price has tumbled about 70 percent over the past year while its market share shriveled.

But the latest quarter showed that RIM is still able to lure buyers for its lower-end smartphones in the more price-conscious emerging markets. And that has helped make up for ground the BlackBerry has lost to cutting-edge devices such as Apple's iPhone and Samsung's Galaxy S III in North America and Europe.

"RIM and its products, however obsolescent, are still relevant in the parts of the planet where most people live," said CCS Insight analyst John Jackson. "The bad news is that these results have little or no bearing on what remains true, and that is, RIM still needs to execute on BB10."

In an attempt to create a buzz, Chief Executive Thorsten Heins gave a preview of the new smartphone and its features to app developers at an event on Tuesday in San Jose, California.

Analysts said RIM struck the right chords at the event but cautioned that it is hard to evaluate how well the BB10 devices will work in real world conditions until they are on the market.

"We are now just a few months away from our launch and our teams are working night and day to meet the expectations we have of ourselves," said Heins on a conference call after the results were released on Thursday.

Heins said RIM executives have met with dozens of carriers in more than 16 countries in the last few weeks and the feedback on the new devices so far has been overwhelmingly positive.

QUARTERLY RESULTS

Shipments of BlackBerry smartphones were 7.4 million in the quarter, easily outpacing Wall Street's expectation of about 6.9 million.

The Waterloo, Ontario-based company reported a net loss of $235 million, or 45 cents a share, in its fiscal second quarter. That compared with a profit of $329 million, or 63 cents, in the same period a year earlier.

Excluding one-time restructuring-related items, the loss came in at $142 million, or 27 cents a share, in the quarter just ended.

Revenue rose to $2.9 billion, a gain of 2 percent from the fiscal first quarter, but the latest result was down about 30 percent from the same period a year earlier.

Analysts, on average, had expected RIM to report a loss of 46 cents a share, on revenues of $2.5 billion, according to Thomson Reuters I/B/E/S.

"You still have revenue declining 31 percent on a year-over-year basis but it's certainly not the train wreck that a lot of people feared," said BGC Partners analyst Colin Gillis. "They live to fight another day."

CASH PILE

RIM also increased its cash to about $2.3 billion from $2.2 billion in the fiscal first quarter.

"In the last two quarters RIM has done a really good job on collecting on receivables," said Sterne Agee analyst Shaw Wu, but he cautioned that this was not sustainable over the long run and RIM would have to return to a profitable business model for it to thrive once again.

While RIM has warned that it faces another operating loss in its fiscal third quarter, it expects its cash position to remain stable unless it is hit by restructuring charges.

Wu believes that the company can achieve this by continuing to draw down on its receivables, which stood just shy of $2.2 billion as of Sept 1.

RIM's chief financial officer said the company had entered into a new secured credit facility of $500 million which expires in September 2013, and in the first half RIM realized some $350 million of the up to $1 billion in cost savings it hopes to achieve in fiscal 2013, which ends on March 2 of next year.

The company, which earlier this year said it would cut about 5,000 jobs to save money, said it has already laid off roughly 2,500 workers.

"It's still bad, but it's a much smaller disaster than expected," said Wu. "These stocks all trade on expectations. Expectations were really low, and they were able to beat that."

RIM's U.S.-listed shares surged 20 percent to $8.55 in trade after the closing bell on Thursday.

(Additional reporting by Alastair Sharp, Allison Martell and Cameron French; Editing by Frank McGurty and Edmund Klamann)

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