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Illustration by Alex Cochran and Michelle Budge, Deseret News

Why falling birthrates may bring chaos to housing

Housing and families are deeply linked. You can’t talk about one without considering the other

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Years ago, my wife and I moved out of Salt Lake City so I could take a job in Los Angeles. It proved to be a lot of fun. We could see the Hollywood sign from our house. The smell of Thai restaurants wafted over our neighborhood. The neon lights from the taco trucks flickered all night.

But a few years later our California sojourn came to an end when we had our first kid. Suddenly, we needed less nightlife and more space. By the time our daughter was 5 months old, we were in the process of moving back to Salt Lake — where we remain to this day. 

A lot of factors informed our decision. Probably the biggest was that the cost of living, especially housing, was far lower than in California. On top of that, our family had gradually converged on Salt Lake over the years, again in large part due to the area’s affordability compared to other parts of the country. And what we learned from this experience was that housing and families are deeply linked. You can’t talk about one without considering the other.

That’s always been true, but it’s an especially pressing point right now for two reasons. First, the cost of housing is bonkers, particularly now (ironically) in cities like Salt Lake and Boise which boomed during the coronavirus pandemic. And second, family sizes are on the decline as Americans have fewer and fewer kids. 

Over time, these two realities are going to crash headlong into each other. They’ll influence the types of houses people want, the neighborhoods that win the most attention, and the cities that end up thriving. In the best-case scenario, all of this could produce a future in which home buyers have an easier time climbing onto the real estate ladder. But there’s also a dimmer possibility in which a shrinking population crumbles the housing market as we know it. 

To understand what’s going on, it’s worth noting that the U.S. birthrate has been falling for years. The current decline began after the Great Recession, and according to the U.S. Centers for Disease Control and Prevention, “the number of births in 2020 is the lowest since 1980.”


The trend toward falling birthrates has become even more pronounced lately, with the Brookings Institute noting that the coronavirus pandemic appears to have led to 60,000 “missing” births that would otherwise have been expected during the first year of the crisis.

Some parts of the U.S., such as Utah, have managed to outperform the rest of the country when it comes to births. But even those regions have seen their rates gradually dip over the years.

One consequence of this trend is smaller households. Pew Research Center has charted the data going all the way back to the late 1700s and found that American households have been steadily shrinking for centuries, which the researchers attribute in part to people having fewer babies. 

So far at least, this trend hasn’t had much of an impact on housing. As anyone who has tried to buy a home recently has discovered, prices feel like they’re out of control. And they kind of are, with data showing an unprecedented spike in prices at the beginning of 2020.


Unsurprisingly, this spike in prices has made housing less affordable, and the problem is especially bad right now in Western states. Data from Redfin, for example, shows that in May, more than 61% of homes in Utah sold above their list prices. Redfin put seven Utah cities including Roy, Taylorsville and Murray in its “most competitive” market category, meaning homes in those areas usually go under contract in just six days, have their contingencies waived and sell above their asking prices.

Snyderville, near Park City, saw home prices rise an astonishing 124.9% in May compared to last year. Overall for the state, prices in Utah were up more than 25% last month compared to May 2021.

By comparison, Redfin’s data shows that overall in the U.S., home prices were up in May by more than 14%. That’s a significant jump, but also far less than what happened in Utah, or in neighboring Arizona, where prices were up more than 22% last month.

Housing and families are deeply linked. You can’t talk about one without considering the other.

All of which is to say — you aren’t imagining it. Finding and affording a house really did get a lot harder recently. As they say on Reddit, housing went to the moon

So what does all of this mean? 

In the short term, changing family dynamics and rising housing costs may reshape the types of homes people want to buy. For instance, Pew has found that more and more people are living in multigenerational households. And that in turn is fueling demand for properties with basement apartments or backyard cottages. These kinds of properties make it easier for young families to live with, say, aging parents. And they let a larger group of family members pool their money to start climbing the real estate ladder. 

Whether the multigenerational trend sticks around is hard to say. But over time the impact of declining birthrates could have even more profound consequences. For example, if declining birthrates eventually led to a shrinking population, it could gradually reduce the demand for housing. In the best-case scenario, this might mean cheaper housing; prices are high right now because demand is high and supply is low. Reduce demand and you’ll have an easier time buying a house. 

But a shrinking population doesn’t necessarily lead to an affordable housing utopia. Just ask Detroit. 

At one point Motor City was the fourth largest metropolis in the U.S. Then its population spent decades in free-fall. Home prices in Detroit are low in response to this decline, but so are wages. As a result, Detroit’s homeownership rate has been falling, not rising, and more than half of the city’s renters are overburdened by their rent. Detroit’s shrinking population has not been a boon to its real estate market. 

Finding and affording a house really did get a lot harder recently.

This process has been replicated all over the U.S. Several years ago, my job involved crisscrossing the country on various reporting assignments. I met a lot of inspiring people on these trips, but I also saw a lot of dusty old “For sale” signs and boarded-up windows in the Rust Belt and Pennsylvania coal country. While a shrinking population does reduce home prices, it also stings the broader economy as well. 

It’s unlikely this type of bust is coming for fast-growing Western states. But it is possible to imagine slower growth being harder on some neighborhoods than others. Urban planning experts such as Charles Marohn have written about how suburban development requires constant growth in order to stay financially solvent. If this type of expansionist development becomes unprofitable, though, aging suburbs are going to face hard choices about how to fund things like street repairs. In this scenario, farther-flung areas might suffer the most from a slower-growing population, even as more centrally located neighborhoods with bigger tax bases and shorter commutes pull ahead.

It’s impossible to say what will happen in the years and decades to come. In 1950, no one could have imagined Detroit as it exists today. In 1900, few would have guessed that Los Angeles would eventually rise to become America’s second city. And overseas, countries such as Japan and Germany are dealing with significant challenges related to aging and shrinking populations, but have also not experienced financial ruin along the way. 

The good news here is that there’s still plenty of time to deal with these issues. In fast-growing places such as Utah, Idaho and Texas, for instance, part of the solution is more family-oriented housing in centrally located neighborhoods, rather than just out on the distant peripheries. It also means adapting building regulations to allow, or encourage, multigenerational households. For example, Salt Lake, like many cities, has an ordinance on the books that lets homeowners add mother-in-law apartments to their properties. But few people have actually built anything. Cities that are serious about thriving as family dynamics evolve need to figure out ways to clear the red tape so that housing can evolve as well. 

At the same time, families themselves need support. Part of the reason birthrates are falling is because in the U.S., it’s really hard and expensive to have kids right now. Parents struggle with expensive or inaccessible child care, a lack of paid leave, and lately, a shortage of critical supplies such as formula. These are complicated issues, but making sure that a region — and a region’s housing market — are healthy over the long term means making sure people can afford to have kids.

In any case, the relationship between families and housing is a deep one. And when one of those things changes it inevitably impacts the other. My hope, then, is that places that are currently thriving — including Salt Lake, where I currently live — manage over the long term to thread the needle through both housing and population growth.