Empty nest:
I posted this for Thanksgiving 2024. The two sons will be joining us this year, too. Nothing changed, except that everyone is a year older.
The same facts remain: Children are expensive. Housing is expensive. It takes two incomes to get by.
2024 Thanksgiving post:
"Over the river, and through the wood,
To Grandfather's house we go;
the horse knows the way to carry the sleigh
through the white and drifted snow."
Lydia Maria Childs, "Over the River and Through the Woods," 1844
This Thanksgiving we have two sons in the house, ages 43 and age 33, both single. No grandchildren.
My wife and I are part of a Boomer phenomenon -- people in their seventies with children but not grandchildren.
The two sons home for Thanksgiving aren't unusual in being childless well into adulthood. About 25 percent of American men over 40 are childless. Women are delaying childbearing, choosing education or career as a first priority. An increasing number of women don't want children. At 1.66 children per woman, the U.S. is well below the replacement rate of 2.1 children per woman. Some women get around to it as their fertility clock runs low; some don't. At age 35-39, 22 percent of women are childless.
There are a lot of reasons for not having children. Children are expensive. They disrupt an education/career path. Household formation starts later, when people pair up and buy a home. Expectations and norms have changed, so childlessness is normalized. And contraception made childbearing a choice.
My grandmother is one of 10, the little girl toward the right, standing beside her mother holding the infant. There are eight children in the photo. Two more are still to come. Children were assets who could help with farm chores.
Housing has gotten expensive relative to earnings. Since 1950 the general rate of inflation raised prices by a factor of 13. It takes $13.10 to buy what a dollar bought in 1950, at the height of the baby boom.
Housing inflated even more.
 |
| 1950 housing advertisement |
Those 1950 houses would have been small -- about 1,000 square feet. One bath. No dishwasher. No air conditioning. No garage. They would not have been to current code on insulation. There would not have been a city requirement of curbs and gutters and capture of rain water into a storm drain system. But at the general inflation rate of 13.1, the larger of the two homes, plus some closing costs, would cost about $110,000 in today's dollars.
My parents had three children. In 1955 they moved from a small rental into a Medford subdivision. The subdivision consisted of homes of about 1,100 to 1,300 square feet. They had one or one-and-a-half bathrooms and a one-car garage. They were owned by families similar to mine: a husband, a wife, and two or three children.
 |
| Google Maps photo |
This house in the photo is similar to the house my parents bought: three bedrooms, one bath, and 1,183 square feet of space. It has a one-car garage. Zillow estimates a current price of $324,500. This price is three times the inflation-adjusted $110,000 current value of the houses in the ad.
No single factor explains the fertility rate, and therefore the paucity of grandchildren, but the cost of housing affects choices young adults make. They face a much higher hurdle for creating new households and the physical and psychological "nest" into which a new baby, or a second or third, fits.
Thanksgivings are smaller now. And grandchildren don't arrive by horse-drawn sled, if they arrive at all.
Subscribe. The blog is free and always will be.]
4 comments:
My mother grew-up in a 2bd/1ba 1,000 sq ft home. It was economical. You don't see that nowadays. Everything being built now is 3bd/2ba 1,500 sq ft or larger. People complain about affordable housing, but it's not being built. Most senior citizens don't need a 2,500 sq ft house. A 1,000 sq ft house would be just fine. Developers need to start creating smaller houses again, even though the builder's profit margin is less.
I had 3 boys, but only one had kids…4 of them. The first three were conceived by in vitro. They tried, but it didn’t happen. Then one day it happened. We call him “Opps”. When mine were growing up, it was difficult. I had to make sure they got their education and got fed and clothed. That’s a lot of responsibility and financially difficult. But, now I have grandkids. I didn’t expect how that would turn out. It’s the best thing that ever happened to me. No responsibility, just play time. I’ve talked to other people with grandchildren. They all say the same thing. Grandkids are better than kids. Go figure.
Ps. We’ll all be together tomorrow at the table. Roasted turkey and grandkids. Can’t get any better than that.
Like Peter (I think) we were born in Medford in 1949. We grew up across town from each other so we did not become acquainted until we began attending THE Medford High School, an overcrowded dump of a building as the school board was building a second "high school" across town. Our high school was a three year institution, and the new school was being built to be a two year institution. From my perspective this was all done to preserve the football team. Peter was a champion debater as I recall, and I was a champion musician. I think we have each kept up with these avocations.
Anyway when I was born my first Medford "house" was a motel room nextdoor to my maternal grandparents who owned it. Over the years we moved 13 times as my Dad's practice as an accountant grew. Finally in 1968 the year after Peter and I graduated, Dad used his GI mortgage benefit, and bought an eastside house in Medford. The mortgage was $67 per month. As I recall the principal was $75,000. It was a 3000 square foot house.
Here’s a little math (for those so inclined)
My parents bought their first 1120 s.f. house in 1960 for $13.00/s.f. That same house recently sold for $467/s.f. or 36 times the original price- which is >300% of what it would otherwise be based on CPI inflation for that same period (10.96). Yes – they made some improvements, but not 300% worth.
The mortgage for that house today with a 20% down payment would require a household income in the top 10th percentile, or north of $210,000 per year. That’s two incomes for most (especially young) people just to cover the nut. Adding children means the choice between either lots of added expenses for childcare, or one parent stays home - which for many - forces the choice between children and home ownership.
Okay, maybe you give up the idea of owning a home for the sake of having children. But even if you rented that house – the income required for the estimated $3600 monthly rental would require $155K per year – still in the top 10th percentile of US households.
But get this – if housing had kept pace with inflation over that same period, that house would be valued at about $170K today, and the household income to fund a fully-loaded mortgage (loan, taxes, insurance and PMI) – would be ~$65K or in the top 45th percentile of US income. Almost half the country could afford that house.
I suppose since we are shutting down most immigration (except Afrikaners apparently) and we are in negative population growth, eventually we’ll have an oversupply of houses and we’ll have a big housing correction. Right?
Post a Comment