Newest threat to battered housing market? The baby bust
If you are holding off on having children, you are certainly not alone in during these hard times.
The number of births across the country has fallen to the lowest levels in more than a decade, Bloomberg reports.
It follows a now well worn pattern in which couples put plans for children on hold during tough times, with the most dramatic example being the Great Depression, when birth rates fell 20 percent.
By contrast, Massachusetts has seen a decline of about 4 percent, in line with the national average.
So what does this have to do with the housing market? Well a lot.
Yes, families with children are just one segment of the housing market. That said, an expanding family can often be found behind many a house hunt, whether it's a couple making a jump from an apartment to a starter home or a small but growing family looking for something bigger.
Sounds corny, but it certainly worked that way in my life. We bought our Natick fixer-upper back in 2002 and had our first child 18 months later. And when Karen and I decided to renovate and expand our house in late 2007, it came just after the birth of our third child. If we hadn't added on, then we would probably have moved.
Why? It starts to get crowded fast once you have a two or three pairs of little feet scampering around. Before we put on our addition, we had all three children sharing the same room. Sure, hardly a hardship, but it was enough to prod us to take action.
So would we have put off having another child if we were making that decision during the much harsher, post-2008 economy? Possibly.
My wife went back to work this fall - she got laid off and then decided to spend a year at home with our three young children. We dealt fine with the loss of income, but it certainly shifted our calculus on what was possible in a range of areas, from vacations to buying a new car.
Not to put a financial tag on it, but having a child is more than just an emotional commitment, and housing is the biggest cost.
Here's a graph from that Bloomberg article. If you are thinking of having children, start saving now.
The annual cost of raising a child ranges between $11,880 and $13,830 for a two-parent family earning $57,600 to $99,730, according to the Department of Agriculture. After housing, the largest expenses are for child care, pre-college education and food. The total for a child in an upper-income family may reach $377,040 by age 17.
