Easier access to mortgages starting in the 1930s spurred the US baby boom, researchers found.
Two federal programs increased homeownership for eligible Americans, boosting marriage and birth rates.
Low homeownership rates today may partially explain declining birth rates around the world.
If you want Americans to have more babies, it helps if it’s cheap and easy to buy a house.
The advent of mortgages with low down payments in the 1930s facilitated a sharp uptick in the US birth rate that created the baby boom, per a National Bureau of Economic Research February 2025 working paper. The findings might help explain why countries across the globe, including the US, are struggling with tumbling birth rates as housing prices soar and homeownership for younger people stagnates.
The researchers — economists Lisa Dettling at the Federal Reserve Board of Governors and Melissa Schettini Kearney at the University of Maryland — found that two mortgage insurance programs led to 3 million additional births between 1935 and 1957, accounting for about 10% of the spike in births associated with the baby boom. The researchers found that these new mortgages lowered the age when people got married and had their first child and increased the total number of kids they had.
In 1934, the Federal Housing Administration introduced a loan insurance program that offered potential homebuyers 30-year fixed-rate mortgages with much lower down payments than had previously been required. A decade later, the Veteran’s Administration began insuring home loans for returning servicemembers with no down payment required.
The FHA and VA-backed loans were a huge hit. The programs helped boost the rate of homeownership among white people of childbearing age from 20% to 50% between 1940 and 1960. And half of this homeownership spike happened before the end of World War II — even as many Americans were still feeling the effects of the Great Depression and few new homes were being constructed.
The researchers analyzed newly hand-digitized data on FHA and VA loans, birth count data from the National Center for Health Statistics, population data from the Census, and personal income data from the Bureau of Economic Analysis to come to their findings.
The analysis finds that these mortgages did not have a discernible effect on births among non-white women because these women were less likely to have access to or benefit from FHA and VA mortgages. Historically, Black Americans were «redlined» out of these mortgages while the bulk of the FHA and VA loans went to white families — the government wouldn’t insure homes in areas that they deemed too risky or undesirable, which were often predominantly Black or minority neighborhoods.
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