Birth Rate Declines Could Spell Trouble for Housing Market

The Center for Disease Control’s (CDC) latest provisional birth report found that the U.S. birth rate fell to its lowest level in 32 years, with 2018 recording 3.78 million births.

“Declining birth rates mean lower demand for rental housing two decades from now when those born in recent years will be entering the rental market. The effects will spread to the single-family market in the following years and will persist for years to come,” states the National Association of Home Builders (NAHB).

According to the CDC’s report, the 2018 birth rate is a 2% decrease from 2017 and the fourth consecutive annual decline. Birth rates rose slightly for women in their late 30s and early 40s, but declined for all women under 35.

Women aged 20-24 recorded 67.9 births per 1,000 women in 2018, which is a 4% decline from 2017. Women aged 30-34 recorded the largest birth rate at 99.6 births per 1,000 women, but still fell 1% shy of 2017’s mark.

The NAHB stated that a record number of young adults live with their parents, relatives, or share housing with roommates. This has caused the headship rates to fall to record lows in 2017.

The Mercury News highlighted this issue last month, as it reported more than a fifth of millennials (ages 23-37) lived with their parents in 2017, according to information from Zillow and the U.S. Census Data.

The report states that the number of millennials returning to live at home has increased 65% in San Francisco and 56% in San Jose since 2005.

“Millennials are facing a double-whammy,” said Matt Regan, a housing and public policy expert for the Bay Area Council. “They are behind a couple of eight balls. They are living through one of the biggest housing crises in history while saddled with the biggest student loans in history. They are often at the bottom of the income ladder and they are getting forced out of the region or moving back to their old rooms at home.”