Too late, not like the market is going to correct itself. Then Millennials will be too old to pick up a mortgage.

Study: If You Want More Babies, Make Mortgages Affordable For Young People

A new NBER working paper (Did the Modern Mortgage Set the Stage for the U.S. Baby Boom? by Lisa J. Dettling & Melissa Schettini Kearney) reveals an unexpected (well, actually expected) catalyst behind America’s famous baby boom: government-backed mortgages that transformed homeownership and family formation patterns.

Why it matters: The FHA and VA mortgage programs impacted more than homeownership – they helped reshape American families at a time when orthodox economic theory suggested birth rates should have been falling, not booming.

  • Birth rates rose 50% between 1935-1960

  • Young adult homeownership jumped from 20% to 50% (1940-1960)

  • FHA/VA loans led to approximately 3 million additional births

  • Every 1,000 mortgages resulted in about 309 more births

  • These loans accounted for ~10% of “excess” baby boom births

  • By the early 1950s, FHA/VA loans represented:

    • 45% of all outstanding mortgages

    • 60% of new mortgage debt