Another adverse effect of high home prices: Fewer babies

Forget about a baby boom — rising home prices appear to be causing many would-be parents to think twice before expanding their family.

An additional 10 percentage-point increase in home values was associated with a 1.5 percentage-point decrease in birth rates among women ages 25 to 29, according to a report released Wednesday by real-estate website Zillow

The biggest effect was noted in Los Angeles County, where it appears that rising home values prompted 2,588 fewer babies born to women in this age group in 2016 than would have other been expected.

This trend was most notable across California, which has been ground zero for rising home prices since the Great Recession. In San Diego County, for instance, a 34% jump in home values corresponded with a 19% downturn in the area’s birth rate.

Outside of California, cities with the greatest drop in birth rates relative to rising home values included Chicago, Seattle, Austin and New York.

Counties with the greatest drop in birth rate relative to home value growth from 2010-2016
County	Main City	Fewer babies after accounting for home value change	Drop in birth rate	Change in median home value
Los Angeles County	Los Angeles	-2,588	-17%	31%
San Diego County, Calif.	San Diego	-1,148	-19%	34%
Orange County, Calif.	Los Angeles	-774	-16%	28%
Cook County, Ill.	Chicago	-709	-9%	-3%
Philadelphia County, Pa.	Philadelphia	-700	-14%	-2%
Travis County, Texas	Austin	-585	-22%	33%
Kings County, N.Y.	Brooklyn	-569	-15%	36%
Alameda County, Calif.	Oakland	-569	-24%	60%
King County, Wash.	Seattle	-545	-18%	32%
Middlesex County, N.J.	Edison	-531	-21%	-7%

“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,” Zillow senior economist Aaron Terrazas wrote in the report.

Of course, correlation doesn’t equate to causation, and other factors could be prompting millennial women to delay or to forego having children. Indeed, the drop in birth rates could also be indicative of a coming recession. A recent study from researchers at the University of Notre Dame found that fewer Americans will opt to have children in the lead-up to a recession.

And in some cities, rising home prices didn’t lead to a lower fertility rate among women ages 25 to 29. In Omaha, Neb., and Provo, Utah, for instance, the birth rate rose between 2010 and 2016 despite home values climbing roughly 10%.