New York Real Estate: New Zillow study links pricey housing and low birthrates

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Is there a link between housing price and birthrate? A new study found out the answer is yes. Our correspondent Karina Huber bring us the details from New York.

A new study by online real-estate site Zillow has found a link between U.S. cities with expensive housing and falling birthrates.

Areas that saw the biggest increase in home values like Alameda County near Oakland, California saw the greatest drop in fertility rates.

AARON TERRAZAS ECONOMIC RESEARCH DIRECTOR, ZILLOW "The home values increased 60 percent between 2010 and 2016 and the fertility rate dropped 25 percent over that same period."

Other factors could explain the correlation. High-cost cities tend to attract women who are career-oriented and that can cause some to delay or even forgo having children.

But rising costs, including student debt, healthcare and housing, seems to be a deterrent to starting families.

AARON TERRAZAS ECONOMIC RESEARCH DIRECTOR, ZILLOW "Eighty-two percent of young adults surveyed said that financial stability is important before they start their family and high property prices make that all the more difficult."

In 2017, the U.S. fertility rate hit an all-time low. There were about 60 births per 1,000 women aged 15 to 44. That's more than three percent lower than in 2016. The deep decline started in 2008 when the financial crisis hit.

KATHY BOSTJANCIC HEAD, US MACRO INVESTOR SERVICES, OXFORD ECONOMIC "Typically you do see fertility rates decline during recessions but they typically rebound. This time it's different."

Bostjancic warns this could be leading to a "demographic time bomb". If birth rates are falling while people are living longer, that leaves fewer workers to support retiree entitlements.

KATHY BOSTJANCIC HEAD, US MACRO INVESTOR SERVICES, OXFORD ECONOMIC "So when you think of social security, you're going to go from three workers to one retiree to two workers to one retiree so that ratio drops."

KARINA HUBER NEW YORK "Bostjancic says fewer young workers will hit U.S. economic growth and the U.S. deficit will increase. She says the retirement age will likely have to increase, entitlements will need to be cut, and taxes will likely to rise."

She says the problem will become acute in about 20 years, but there is one silver lining.

KATHY BOSTJANCIC HEAD, US MACRO INVESTOR SERVICES, OXFORD ECONOMIC "We need net immigration. And looking at the numbers we assume that net immigration is about a million or so per year going forward. If that number is less, that's even more of a burden on the economy and the budget."

Karina Huber, CGTN, New York.