Rising Housing Costs and Fertility Rates

The relationship between housing costs and fertility rates has been a topic of interest in recent years. A new study by Benjamin K. Couillard, a doctoral candidate in economics at the University of Toronto in Canada, sheds light on this issue.

Introduction to the Study

The study finds that surging housing costs are responsible for more than half of the decline in US fertility rates since the early 2000s. Couillard’s analysis, which draws on US Census Bureau data to track rent patterns nationwide, concludes that, had housing costs remained flat after 1990, roughly 13 million additional children would have been born by 2020.

Key Findings

A new study has found that surging housing costs are the single biggest factor behind America’s declining birth rates. zimmytws – stock.adobe.com
The research attributes 51% of the total fertility decline between the 2000s and 2010s to rising rents and home prices. “That’s a surprising result,” Couillard said. “It suggests that housing costs are a major driver of fertility decline. Housing abundance is not just about affordability; it’s about long-term demographic sustainability.”

The Impact of Housing Costs on Fertility

The study links the relentless rise in rents — up 149% between 1990 and 2020, according to US Bureau of Labor Statistics data — to a birth rate that has slid from 2.08 children per woman in 1990 to 1.64 by 2020. Last year, the number hit a record low of 1.599, far below the 2.1 replacement rate needed to maintain a stable population. Research by Benjamin K. Couillard at the University of Toronto estimates that rising rents and home prices accounted for 51% of the US fertility decline between the 2000s and 2010s, and that if housing costs had stayed flat since 1990, 13 million more children would have been born by 2020. Syda Productions – stock.adobe.com

The Living Arrangement Model

Couillard’s model separates housing costs from other economic pressures to show how affordability influences both timing and willingness to have children. “It’s actually more accurate to call it a living arrangement model, where fertility is a key component,” he said. People “can choose to start a family or remain with their parents, and the model captures dynamic considerations like life-cycle timing and long-term housing needs.” The study argues that expensive housing not only deters families from having children but also reshapes where and how people live, with fertility decisions tied to affordability and living arrangements. alfa27 – stock.adobe.com

Implications for Policy

Realtor.com senior economist Jake Krimmel, who reviewed the study, said the findings are striking for how precisely they quantify what many have long suspected. “It’s one of those rare findings that’s intuitive, important and has actionable implications for policy,” Krimmel said. The research suggests that the fallout extends well beyond housing markets. With fewer children born each year, economists warn that a shrinking workforce could strain federal programs such as Medicare and Social Security, which depend on a large base of younger taxpayers to support retirees. Since 1990, rents have jumped 149% — far outpacing inflation –while the fertility rate has fallen from 2.08 to 1.64, well below the 2.1 replacement level. Anatoliy Karlyuk – stock.adobe.com

Conclusion

The study highlights the significant impact of rising housing costs on fertility rates. Couillard argues that tackling housing costs could help reverse these demographic trends. “If we can get housing costs down, that’s good for affordability, but it also helps us avoid the demographic problems that come with aging populations and declining birth rates,” he said. “A maximalist housing policy, one that aggressively expanded supply to prevent costs from rising, could have solved the majority of the fertility problem.” Krimmel agrees that the findings point to a policy gap. “To boost fertility, we not only need a larger housing stock, but a different housing stock,” he said. “We need to build more housing, particularly larger housing units and apartments that can accommodate growing young families.”

FAQs

• Q: What is the main factor behind the decline in US fertility rates?
  A: According to the study, surging housing costs are responsible for more than half of the decline in US fertility rates since the early 2000s.
• Q: How many additional children would have been born by 2020 if housing costs had remained flat since 1990?
  A: The study estimates that roughly 13 million additional children would have been born by 2020.
• Q: What is the current fertility rate in the US?
  A: The current fertility rate in the US is 1.64 children per woman, which is below the 2.1 replacement rate needed to maintain a stable population.
• Q: What are the implications of the declining fertility rate for federal programs?
  A: The declining fertility rate could strain federal programs such as Medicare and Social Security, which depend on a large base of younger taxpayers to support retirees.
• Q: What is the proposed solution to address the issue of declining fertility rates?
  A: The study suggests that tackling housing costs and implementing a maximalist housing policy could help reverse the demographic trends and boost fertility rates.