What is a primary factor that affects household formation?

The level of individual income is a primary factor that affects household formation because it directly influences a person's ability to secure housing. Higher income typically enables individuals or families to afford more substantial housing options, thereby facilitating the creation of new households. It plays a crucial role in determining if someone can move out and live independently, buy a home, or rent an apartment.

Additionally, income levels can affect demographic trends, such as whether individuals can afford to marry or start families, as financial stability is often a prerequisite for such life decisions. In contrast, while factors like the availability of public transportation, the number of housing developments, and the quality of local schools can influence household dynamics and preferences, they do not have the same direct correlation with the economic capacity necessary for forming households.