Will Making More Babies Save the Housing Market?

Will 2018 be the year when people finally started making more babies again, and eventually started buying more homes to raise their new families in? Recent data – at least as far as birth rates go – appears to have pointed in that direction.

Here’s a look at some of the most recent statistics.

People have been spending less time sleeping and more time . . . .

Back in 2007 there were nearly 4.32 million births in the U.S.

More babies were born that year than in any other time in the history of the country. 2007 is also the year when Apple introduced the first iPhone, and since then the annual number of births in the U.S. has been trending downward.

Cause and effect? We’ll leave it up you to decide. What we do know for certain is that over the past 10 years the aggregate number of births has declined by 10.7%.

But in the first half of 2018 people have become more productive, so to speak, and the declining birthrate was slowing down. Through the first half of 2018 births were down just 1.2% year-over-year compared to a nearly 2.3% decline in 2017.

Teenage births continue to decline

The number of babies born to teenagers continues to significantly decline. In 1980 teenage births made up 16% of all births, decreasing to 13% by 1990 and only 5% through the first half of 2018.

Over the short-term teenage births are declining too. The most recent data suggests the teenage birth rate declined 7.2%, compared to 7.4% in 2017.

Birth rates for ages 25-Plus are rising

During 2017, birth rates for women at least 25 years of age declined 1.2% while the most recent data for 2018 showed birth rates have increased slightly (0.1%), while birth rates for ages 35-Plus increased 2.9% year over year.

Will more babies make more people buy more homes?

Last year, in “Is There Really A Shortage of Homes Being Built?” and “Why the U.S. Housing Market Will End Up Like Japan”, we described how a long-term structural change is taking place in the population of the U.S.

A declining birth rate is only one part of the equation. Even though birth rates have declined less over the past couple of years, people across all age groups and demographics are choosing to rent where they live rather than own.

Part of this choice has to do with lofty home prices and rising interest rates. But a growing number of people simply see less value in homeownership than previous generations.

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