Recovery from our recent recession will continue in 2014, but it will be greatly reduced by a surprising factor — the low number of new household formations.

About 1.1 million new households form in a normal year. These new households are created by a number of factors, such as recent graduates moving out on their own, families splitting up and immigrants coming to the country, it was noted in a report published by the National Association of Realtors.

Ever since the Great Recession, household formations are not keeping pace with historical numbers. The latest Census data show that about 380,000 new households formed in the last 12 months — a small fraction of the norm.

Also, the data show that the number of young adults living with their parents is increasing. Saddled with college debt, they are facing high rates of unemployment, keeping many of them from moving out on their own. Of 25 to 34 year olds, about 75 percent were employed as of September, the report stated.

The new-home industry has certainly felt the constraints in household formations. It's been operating at about 50 percent of where it was during the housing boom.

The pent-up demand among young adults could be a big driver in ramping-up household formation in the near future. For example, the 1.8 million individuals currently living at home could translate into an additional 590,000 households and about 200,000 additional homeowners, according to NAR's Economist Outlook.

Q: Is it going to be a bumpy road for real estate in early 2014?

A: One credible prediction comes from Fannie Mae. In the aftermath of the federal government shutdown and contentious debt ceiling negotiations, Fannie Mae predicts continued market volatility for at least the next few months.

Consumer sentiment toward the economy and the housing market wavered last month, and they expect that to continue into the new year, despite low mortgage rates and robust annual home price gains.

Q: Is home affordability still improving?

A: Housing affordability took a hit in the third quarter — the result of climbing interest rates and recovering home prices. According to an industry index assessing consumers' opportunities for homeownership, families earning the national median income of $64,400 in the July-September period could afford 64.5 percent of the new and existing homes sold during that time.

That's down from 69.3 percent in the second quarter, marking the biggest index decline since the second quarter of 2004, it was reported by DS News.

Q: Does a home sale sometimes include an automobile?

A: That type of deal is rare, but it does happen. For example, the buyer of a Boca Raton, Fla., mansion not only gets the largest home in the area at 16,000 square feet, but the real estate agent is also offering a free, limited-edition Rolls-Royce Phantom, valued at $450,000, to sweeten the pot. Only 12 of them exist in the world, according to the agent. The buyer will have to pay full asking price, however, to get the car.

The listing agent describes the $12.75 million mansion, known as "Villa Bella Lago," as reminiscent of "The Great Gatsby" or old Hollywood-style estate. The waterfront mansion has seven bedrooms, two gourmet kitchens, a nine-car garage and a private marina with room for two yachts.

Q: What is the new "Know Before You Owe" plan all about?

A: The Consumer Financial Protection Bureau recently issued a rule requiring lenders to use its disclosure templates to lay out mortgage terms for borrowers.

The new "Know Before You Owe" mortgage forms will replace existing federal disclosures, and the CFPB says they'll help consumers better understand their options, comparison shop for the best mortgage deals and avoid costly surprises at closing.

To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.