declining birth rates linked to rising home values

If your home is appreciating quickly, odds are you may not be having as many kids. According to Zillow Research, a recent decline in fertility was most significant in counties where home values rose the most. Conversely, “the change was smaller – and sometimes even up – where home growth was weaker,” wrote economic analyst Jeff Tucker.

Tucker went on to emphasize that although the trends are likely related, they are not necessarily causal. Women in their late 20s seem to be most likely to “participate” in this trend, and the declining birth rate may be partially a generational preference as well as linked to the Great Recession. Fertility started to fall in 2008, when the rate was 2.12 children per woman, and hit a low of 1.93 in 2010. Interestingly, by 2016, despite an even lower fertility rate of 1.82, Americans said they believe the ideal number of children to have is 2.6, up from 2.5 in 2010.

The link between lower birth rates and higher home prices actually is more likely to have to do with the cost of purchasing a home than the rate of appreciation. Because most Americans say they delay childbirth because they want to be “financially established” before having children, rising home prices and delayed homeownership likely create a situation that delays having offspring as well.

“There was a strong negative relationship between home value growth and birth change across large counties in the U.S. for 25- to 29-year-old women between 2010 and 2016,” Tucker wrote. He cited as an example, Fairfax County, Virginia, where home values rose 17 percent over that time period and fertility fell 8.2 percent. This trend is particularly dominant in urban areas, and less strongly expressed in the South and Southwest.

“The correlation observed here is by no means proof that home value growth causes fertility declines,” Tucker emphasized. He added, “There are many other confounding factors that could explain this relationship as well, such as the possibility that cultural values or the cost of childcare varies across counties with some correlation to home values.”

Do you think there is a link here?