Birth rate hits record low, housing costs weigh on family planning

"The replacement level or rate needed to sustain the population is 2.1, a rate the U.S. met roughly two decades ago. The decline reflects broader social and economic shifts, including delayed marriage and parenthood. But economists and demographers cited in a Realtor.com report point to housing costs as a significant factor. Larger homes that can comfortably accommodate multiple children have become increasingly out of reach for many families, Hannah Jones, senior economic research analyst at Realtor.com, said in the report."

"As prices have far outpaced wage growth, couples may delay homeownership or remain in smaller homes longer, limiting the space available for growing families. Median home prices have surged far beyond inflation. In 2006, a single-family home sold for $221,923 on average equivalent to about $343,806 in today's dollars. By 2024, the median price had climbed to $410,100. Over that same span, the fertility rate slid from 2.1 to under 1.6 births per woman."

"A 2012 paper by the National Bureau of Economic Research found a direct link between housing costs and family size. Economists Lisa Dettling and Melissa Schettini Kearney concluded that a 10% rise in home prices reduces births among non-homeowners by 1% in the average metro area. Their study examined fertility rates of women ages 20 to 44 across 66 metro areas between 1990 and 2006 a period when home prices climbed steadily while birth rates remained flat."

The replacement fertility rate needed to sustain the population is 2.1, and the U.S. fertility rate has fallen to under 1.6 births per woman. Delayed marriage and parenthood contribute to the decline. Housing costs have risen far faster than wages, pricing larger family-sized homes out of reach for many prospective parents. Median single-family home prices rose from $221,923 in 2006 (about $343,806 in today's dollars) to $410,100 by 2024. Research shows a 10% rise in home prices reduces births among non-homeowners by about 1% in the average metro area. Homeowners can use equity to support child-related expenses or have children sooner.

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