The Corner

Forget Housing

Counting on housing prices to make a comeback and rescue your balance sheet? Forget about it. Here’s Spengler (David Goldman) making a point that’s been obvious for at least a decade — no babies = reduced demand for housing. Duh:

Housing faces a demographic headwind that may last indefinitely, as I showed in a May 2009 study for First Things entitled “Demographics and Depression.” As I wrote:

America’s population has risen from 200 million to 300 million since 1970, while the total number of two-parent families with children is the same today as it was when Richard Nixon took office, at 25 million. In 1973, the United States had 36 million housing units with three or more bedrooms, not many more than the number of two-parent families with children – which means that the supply of family homes was roughly in line with the number of families. By 2005, the number of housing units with three or more bedrooms had doubled to 72 million, though America had the same number of two-parent families with children.

This will get worse, not better: The Virginia Tech economist Arthur C Nelson predicts that American households with children will comprise just a quarter of the total by 2025 compared to half in 2010 as the Baby Boomers retire, and that demand for large-lot single family homes will fall by 40%. 

And now the Obama administration — which ought for economic reasons to be encouraging the production of lots and lots of children as future galley slaves aboard the USS Entitlement — has declared pregnancy a disease and is ordering insurance companies to make contraceptives available for free. Obviously, family planning is and should be a matter of conscience, but as a matter of public policy (assuming one wants the Ponzi Scheme State to continue its inexorable, vote-buying growth), there’s really only one logical position to take:

More kids, to pay Social Security and Medicare taxes, and to raise demand in the housing market. But, as some countries have discovered, once the suicide rot sets in, it’s tough to stop.

Michael Walsh — Mr. Walsh is the author of the novels Hostile Intent and Early Warning and, writing as frequent NRO contributor David Kahane, Rules for Radical Conservatives.

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