Correlation Between Birth Rates, Home Values Suggests 'New Phenomenon'

Changes in birth rate and home values were previously found to have a positive correlation. New findings suggest the opposite.

Communities with higher home values historically tend to have lower birth rates, but Zillow's latest cross-sectional data post-recession shows that counties that already had low birth rates eight years ago experience greater losses, and there was a negative correlation between the change in birth rate and the degree of change in home value growth. The research suggests a relationship between falling homeownership and birth rates for young Americans and rising home values, and depicts current headwinds facing young adults who seek to have their own families. 

While the negative cross-sectional relationship was well-known, previous research actually showed a positive relationship between changes in home prices and birth rates. A recent, excellent article on the subject in the Journal of Public Economics by Lisa J. Dettling and Melissa S. Kearney, economists at the Federal Reserve Board and at the University of Maryland, found as its headline result that a $10,000 home value increase was associated with a 0.8 percent increase in fertility. This was derived from their more nuanced findings that non-homeowners have fewer babies in response to higher prices, while existing homeowners raise their birth rates.

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