Home prices have fluctuated dramatically in the last 15 years. First, we have the house-price boom. Then it was followed by a house-price bust. Have there been some impacts of this fluctuation on family choices? N.C. State University economist Mike Walden answers.
“This is a very interesting area of inquiry… . And the answer is yes. And specifically some researchers have been looking at the impact of fluctuations in home prices on fertility — on the rate at which families have babies. And what they have found is a distinct difference in the impact between homeowners and non-homeowners.
“For homeowners, when prices were going up, this meant that the homeowner was actually getting more wealthy. And, what the researchers have found, that added wealth motivated those households to increase their rate of fertility.
“On the other hand, when home prices have gone down, homeowners’ wealth has gone down, and the researchers have found fertility rates also went down.
“But the impact for non-homeowners has been exactly the opposite. According to this new research, when home prices went up, that made the cost of buying a home more expensive for someone who didn’t already buy a home. So they had to take more money to buy the home, leaving less money perhaps to devote to bearing children. So among non-homeowners, when home prices went up, fertility actually went down. And then the reverse: When home prices have come down, it’s made it easier for non-homeowners to buy, thereby they haven’t had to devote as many resources to buying that home. They’ve had more money left over for children, and their fertility rate has gone up.
“So, very, very, very interesting impact here. And indeed I should add one more thing. This research has found that the impact of fluctuating home prices on fertility has been greater than the impact of fluctuating employment.”