Home prices rise as birth rate drops

by Francis Monfort04 Jul 2018

As home prices sharply increased along with the economic recovery from 2010 to 2016, the birth rate simultaneously dropped, and the two trends might be related, according to an analysis by Zillow.

The study relied on the Zillow Home Value Index as well as age-specific fertility rates from the Centers for Disease Control and Prevention’s National Center for Health Statistics.

Zillow found that counties with the highest increases in home values recorded the sharpest declines in fertility. Meanwhile, counties where home value growth was weaker saw smaller changes, or even an increase, in fertility. According to Zillow, there was a strong negative relationship between home value growth and birth rate change across large counties in the US for 25- to 29-year-old women, from 2010 to 2016.

The study found that on average, if a county’s home value increase was 10 percentage points higher than another county’s, its fertility rate fell 1.5 percentage points further. Urban counties in the West and Northeast especially drove the results, even after accounting for the effect of home-price increases. For instance, Los Angeles County’s birth rate among 25- to 29-year-olds fell 16.8% as their home prices rose 31%.

Meanwhile, some South and Southwest counties bucked the trend as they saw births grow by more than home values predicted they would.

While the negative relationship between the two trends is statistically significant, Zillow said that there is a great deal of variation in fertility declines unrelated to home values. Zillow also said that another caveat is that the correlation observed in the study is by no means proof that home value growth causes fertility declines.

 

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