Are Rising Home Values An Aphrodisiac?

It’s been established that reduced income in the household is a major turnoff. As per capita income falls, so does the birth rate. And this of course makes logical sense. Now research is going a step further and seeing how people respond to improving home values:

Our results suggest that indeed, short-term increases in house prices lead to a decline in births among non-owners and a net increase among owners. The estimates imply that a $10,000 increase leads to a 5 percent increase in fertility rates among owners and a 2.4 percent decrease among non-owners. At the mean U.S. home ownership rate, these estimates imply that the net effect of a $10,000 increase in house prices is a 0.8 percent increase in current period fertility rates.

They also found that rising home values account for more fertility than an improving unemployment rate.  The fact that rising home values is a detriment to non-homeowner fertility is also not a surprise.  In an age where the American Dream relies less on owning a home, it will be interesting to see how strong this correlation is in the future.

Read: House Prices and Birth Rates: The Impact of the Real Estate Market on the Decision to Have a Baby (via HBR)

  • By The Weakonomist
  • Posted in Housing
  • Tagged American Dream, Talking Shareholders
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