Trend #3: The Home is a Family Formation Station

July 31, 2017 at 10:00 AM | Posted by Team DataTree

 

A recent study9 by the Urban Institute found that between 2007 and 2012 birth rates among women in their twenties declined by more than 15 percent.

Trend 3-1.pngThe drop was, in part, caused by the decline in the rate of marriage. This doesn't necessarily suggest that either the marriage rate or birth rates won't increase as Millennia ls choose to have children at a later age, but it does delay the decision to buy a home.

In our analysis, we find that just as the decision to marry influences the decision to own, so does the decision to have children. As one might suspect, the more children in a household, the more likely the decision to own versus rent. The homeownership rate is 1.7 percent higher for households with one or two children compared to households with no children, and it is 5.4 percent higher for households with three or more children.

Access the Complete Report - 6 Trends Poised to Reshape Homeownership Demand.png    Figure 4 shows, all other factors being equal, the change in the homeownership       rate over time when correlated with the change in the number of households with     three or more children. Similar to the influence of marriage on homeownership,         as the number of households with three or more children increased from 1995 to       2006, the homeownership rate also increased. Since then, the declining number       of households with three or more children has driven the homeownership rate           down. In fact, from 2006 to 2015 the homeownership rate declined 2.6 percent         due to the decline in the number of households with three or more children.


                                                               In 2016, the homeownership rate improved slightly as Millennials began to settle                                                                  down and form families.

                                                              Figure 4. More Children, More Homeowner
                                                              Year-Over-Year Change in Homeownership Rate (%, 3 or More Children)

                                                                           Trend 3 graph.png

 

 

 

 

 

                                                              This doesn't mean the desire for homeownership is g one . In fact, a case could                                                                   be made that policies that encourage marriage and having children would                                                                             increase homeownership. Yet, that may not be necessary. As Millennials age, we                                                                 may see an increase in the share of married households with children, and a                                                                       corresponding increase in homeownership demand.

                                                             To access the full study, please download it from the First American Economic                                                                    Center Blog.  When you need real estate and homeownership data, DataTree.com                                                              is the solution. Start your free trial to see for yourself.  

                                         

Topics: homeownership, DataTree, millennials, real estate