BIRTH RATES

Birth rates fall fastest in ar­eas with soar­ing home prices

The Day - - HOME SOURCE - By Day Mar­ket­ing

The hous­ing mar­kets that have seen the great­est in­creases in home val­ues have also seen some of the most pro­nounced de­creases in birth rates, ac­cord­ing to an anal­y­sis by the real estate site Zil­low.

The com­pany re­cently looked at the changes in val­ues and birth rates in sev­eral coun­ties in the United States be­tween 2010 and 2016. It con­cluded that a boost of 10 per­cent­age points in home val­ues was as­so­ci­ated with a drop of 1.5 per­cent­age points in the birth rate among 25- to 29-year-old women.

The ef­fect was es­pe­cially pro­nounced in Cal­i­for­nia, where home prices have been ris­ing rapidly in re­cent years. In Alameda County, in the Oakland area, home prices were up 60 per­cent be­tween 2010 and 2016 while the birth rate among young women dropped by 24 per­cent. A 58 per­cent in­crease in home val­ues in Santa Clara County, in the San Jose area, was as­so­ci­ated with a 20 per­cent re­duc­tion in the birth rate.

San Diego County had a 34 per­cent in­crease in home val­ues and a 19 per­cent drop in the birth rate, while the birth rate in Los An­ge­les County was down 17 per­cent as home val­ues rose by 31 per­cent. In San Bernardino County, home val­ues were up 49 per­cent as the birth rate among young women fell by 8 per­cent. Or­ange County had a 28 per­cent in­crease in val­ues and a 16 per­cent de­crease in the birth rate.

Out­side of Cal­i­for­nia, sig­nif­i­cant re­duc­tions in birth rates were ob­served in Texas, New York, and Wash­ing­ton. In Travis County, Texas, which in­cludes Austin, home val­ues in­creased by 33 per­cent and the birth rate was down by 22 per­cent. Home val­ues in Seat­tle's wider metro area of King County rose by 32 per­cent as the birth rate fell by 18 per­cent. The birth rate in Kings County, N.Y., which in­cludes Brooklyn, was down 15 per­cent, while home val­ues were up 36 per­cent.

In Florida, sig­nif­i­cant price in­creases weren't as­so­ci­ated with as sig­nif­i­cant a decline in birth rates. Val­ues were up by 50 per­cent in Mi­ami-Dade County, but the birth rate fell by just 4 per­cent. In Palm Beach County, home val­ues rose by 37 per­cent and the birth rate fell by 4 per­cent.

Some mar­kets saw a de­crease in both home val­ues and birth rates be­tween 2010 and 2016. Value fell by 8 per­cent in Baltimore County, Md., while birth rates were down by 13 per­cent. In New Cas­tle County, Del., which in­cludes Wilm­ing­ton, the birth rate dropped by 19 per­cent as home val­ues fell 7 per­cent. Mid­dle­sex County, N.J., which in­cludes the city of Edi­son, had a 7 per­cent re­duc­tion in val­ues and a 21 per­cent drop in the birth rate among young women.

Zil­low said the find­ings might be a re­flec­tion of younger peo­ple in more ex­pen­sive mar­kets putting off hav­ing chil­dren un­til they can move to a more af­ford­able area or gain enough fi­nan­cial se­cu­rity to af­ford both a home and the costs as­so­ci­ated with rais­ing a child. How­ever, the com­pany also cau­tioned that nu­mer­ous fac­tors could in­flu­ence whether a cou­ple opts to de­lay hav­ing chil­dren or not have chil­dren at all, and that cor­re­la­tion in the fig­ures does not nec­es­sar­ily in­di­cate cau­sa­tion.

"The big ques­tion this re­search raises is whether mil­len­ni­als are sim­ply de­lay­ing child­birth into their 30s, or are ac­tu­ally hav­ing fewer chil­dren – and so far the data are mixed," said Aaron Ter­razas, se­nior econ­o­mist at Zil­low. "Re­cently re­leased pre­lim­i­nary data shows fer­til­ity rates among 30-some­thing women fell in 2017 for the first time since 2010, an omi­nous sign, but then again, re­spon­dents to re­cent cen­sus sur­veys in­di­cate they ex­pect to even­tu­ally have just as many chil­dren as re­spon­dents in prior years. Ul­ti­mately, this data adds an­other layer to the argument that ris­ing hous­ing costs are con­tribut­ing to mean­ing­ful de­lays in achiev­ing a num­ber of key life mile­stones, in­clud­ing get­ting mar­ried and buy­ing a first home – two very im­por­tant steps on the road to start­ing a fam­ily."

A pre­vi­ous study by the U.S. Fed­eral Re­serve Board and Uni­ver­sity of Mary­land de­ter­mined that in­creases in home prices had a mixed ef­fect on birth rates. Those re­searchers found that birth rates went up among home­own­ers whose prop­erty val­ues in­creased, per­haps due to a cou­ple re­al­iz­ing greater fi­nan­cial se­cu­rity from the added eq­uity and go­ing for­ward with their goal of rais­ing a child. How­ever, birth rates also fell among non-own­ers when home prices in­creased.

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