On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Sunday, March 2, 2014.
The number of people divorce rose again for the 3rd year in a row. The broader economic effects of the increase are clear: It is contributing to the formation of new households, boosting demand for housing, appliances and furnishings and spurring the economy. Why are more people divorcing now?
Since Florida’s economy and housing market are recovering, more and more couples are moving forward with their divorces after years of showing up to work as if nothing were wrong in their personal lives.
Hard economic times kept many couples locked in unhappy marriages. Often people stay together for financial reasons. As Bloomberg reports, Amy Derose and her husband Lawrence stayed together for the sake of their engineering firm in Pompano Beach:
“The business was hanging on by a thread and we had to hang on,” said Derose, 53, who had been married 35 years and worked as the business manager. “We couldn’t afford to split. He needed me in the business and I needed him.”
However, there are economic effects from the increase in divorce filings: they are creating new households, boosting demand for housing, appliances and furnishings and may spur the economy.
More than 5 million new households were established in the past 4 years, and that helps to create housing demands by creating two households when before there was only one.
Newly single men are renting apartments to stay close to their children and attend school events. Newly single women are entering the work force:
“In unhappy marriages, they have started having the macroeconomic ability to unwind,” he said. That is creating “a little bit of a tailwind” for apartments.
Also helping to motivate people to get out of unhappy marriages are the rising stock and home values. The increase in home equity and investments has given people a sense of greater financial security.
In Florida, which saw home-price gains after huge drops, we are experiencing an increase in divorce rates to above 2008 levels:
“In many cases after divorce, people sell their homes and divide up the proceeds,” he said, which provides “each of them with a nest egg to begin their separate lives.”
Although a bigger stock account and home equity to divide may motivate a divorce, splitting into two homes takes a financial toll on a couple. However, many couples report that ending an unhappy marriage was:
worth every moment of hardship. I had to take full ownership of my life, my choices, my future, and my happiness.
You can read the Bloomberg report here.