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Is Abortion Contributing To Lack Of Demand From First Time Home Buyers?

By Donna S. Robinson | March 14, 2012

In doing research for various articles for Realty Biz News, I see a lot of data, and some of it has caused me to ponder on the question of whether abortion, and it's effect on population growth, has begun to impact the U.S. housing market.

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First, there is the birth rate data, clearly showing that live births in the U.S. are much lower today than they were in the years prior to legalized abortion, and indeed, prior to the development of the widespread use of contraceptives, which took place just a few years before abortion was legalized in the U.S.

Next we have data on first time buyers, a group that is closely tracked by the National Association Of Realtors and the National Association of Home Builders, for obvious reasons. First time buyers tend to be the life blood of the real estate industry, and any decline in that market would spell long term problems with the supply - demand issue, which has been at the forefront of housing market analysis lately.

According to analyst Laurie Goodman, of Amherst Securities, new household formation began to drop in 2007. and has been averaging only 0.5 million new households per year, versus an expectation of 1.2 million new households per year.

According to this report from the NAHB, the average age of a first time home buyer is approximately 33 years, and home buyer demand is not materializing as expected, though this report does detail a number of other reasons, related to credit availability and the recession (not to be ignored, but likely not the only factors at work here).

And this article from AG Beat, quoting the NAR's 2011 report on home buyer analysis says:

"...The median age of home buyers has jumped from 39 years old to 45 years old as first time home buyers have dropped to a third of all buyers, down from half of all buyers..."  

There have been 55 million abortions since 1967, according to this article on the "Economic Impact of Abortion".  It seems to be common sense that if you remove 55 million people from the general population, it's going to have a long term impact on home sales, once enough time passes for the consequences to develop fully.

In 2007 we crossed the line of correlation between average age of first time home buyers, and the legalization of abortion in 1973.

For the benefit of those who may be on the verge of "popping a vein" while reading this, let me say that this article is not an attempt to take sides on the abortion issue itself. It's merely pointing out what seems to be happening, if you are willing to review the data. I once heard someone say that "you can't pick up one end of a stick without picking up the other end".

From my perspective, one of the problems that led to the collapse of housing was a false sense of demand in the early 2000's. The home sales that we were experiencing were not totally driven by real demand from end user buyers. Rather a significant portion of this "demand" for housing that was manifested during the boom years was from investors or speculators who were attempting to cater to end-user buyers. The boom busted because those investors and speculators simply did not have enough demand from real owner-occupants to off-load all of the homes they had purchased or built, and the boom cycle ran out of steam.

While there is no question that tight credit, the recession, and other issues have also had an impact on household formation in the short term, a large scale loss of population, whatever the reason, can lead to long term consequences for the housing market, with the resulting long term impact on sales and home prices. While the recession has supposedly ended, the consequences apparently have not. It will be very interesting to see how this plays out over the next few years.

Donna S. Robinson has been involved in the real estate industry since 1996. A licensed agent and real estate investor, she is a recognized expert on residential real estate investing. Her course, "Fundamentals & Strategies For Real Estate Investing" is approved for CE credit by the GA Real Estate Commission. She has authored several books on real estate investing, and consults with residential investment companies. She also offers coaching services to real estate investors.

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