Rising Home Equity Funds a Rising Birth Rate, but Only for Homeowners

A $10,000 increase in average home prices leads to a 5% increase in fertility rates among homeowners but a 2.4% decrease among nonowners, an effect that is substantially larger than the impact of jobless-rate fluctuations, say Lisa J. Dettling of the U.S. Federal Reserve Board and Melissa S. Kearney of the University of Maryland. When house prices rise, homeowning couples apparently use some of their increased housing wealth to “fund” their childbearing goals; but for nonowners, rising prices are one more barrier to having children.

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