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Birth Rates and Home Values – What is the connection?

Cassie Steele 593 Views
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Jeff Tucker of Zillow has come up with some surprising new research that shows that birth rates have fallen in the counties where home values have increased the most. Los Angeles is one of these cities. The average home price is $675,000, in comparison to the national average, which is around $200,000. So what can account for the link between birth rates and home values?

Accommodating a young family 

House prices are going up in the Los Angeles area, and this has a significant effect on what people can afford to purchase in the area – in particular, young people, between the ages of 21-40. It means that they are buying smaller properties, generally with less space. The majority of people that plan to start a family, tend to ensure that they have enough space to do so – or put off this decision until they are a little older, and can perhaps afford to live somewhere bigger. It has a direct effect on birth rates in the county.

The cost of having children 

The average cost of raising a child in America is now $233,610, it’s certainly an expensive business. This financial responsibility goes hand-in-hand with the cost of purchasing a home and has a direct effect on fertility rates. Added to this some of the other financial aspects that come with a family, such as a lack of paid parental leave, and in particular the cost of childcare. If you are considering having a child, these monetary responsibilities can be a little daunting – especially if you know that you will be relying on a sole income for many months following the birth. Many people are leaving having children until later in their lives, or not at all.

How much have birth rates fallen?

In Los Angeles, and New York too, where the cost of houses is booming, the birth rates have fallen by 13%, since 2010. This is double the amount that it has fallen in areas of the United States that have medium increases in home value. It is worth considering too, that in parts of Los Angeles, where home values are high, people are more career driven, and choose to leave starting a family until their 30s. Having a family is more than just a social issue.

In Los Angeles, there are fewer births in comparison to the rest of the country. How this will affect the resident population remains to be seen.