Contrary to typical trends, the number of births across the country are dropping despite appreciating housing markets, according to Zillow.
Home values are appreciating the fastest they have in 12 years and are projected to rise another 6.5 percent over the next year. While the economy has rebounded from the Great Recession in recent years, home values have risen nearly 10 percentage points. Most would think this would be a perfect time to start having more children, but that is not the case.
Zillow found that most people want to be financially stable before becoming parents, which is likely why couples are waiting to have children during a time while home prices are quickly on the rise. Raising a children is expensive, and most parents are prioritizing moving to an affordable community before having children.
Birth rates among women ages 25 to 29 fell 17 percent from 2010 to 2016, according to Zillow. About 2,500 less babies were born than expected in 2016 in Los Angeles County, where this trend is most pronounced. Similarly, 1,148 less babies were born in San Diego County. Both of these areas saw a 30 percent increase in home values from 2010 to 2016. Markets in Austin, Brooklyn, and Seattle are also seeing similar shifts.
“There are many highly personal reasons beyond housing costs why some couples may delay having children, or choose not to have them at all, and it’s important to remember that correlation does not necessarily mean causation,” said Zillow senior economist Aaron Terrazas. “The big question this research raises is whether millennials are simply delaying childbirth into their 30s, or are actually choosing to have fewer children – and so far, the data are mixed.”