A little-known consequence of one of the biggest housing programs in American history may offer a clue about why birthrates rose so dramatically after World War II and why they have become so difficult to lift today.
Economists Melissa S. Kearney of the University of Notre Dame and Lisa J. Dettling of the Federal Reserve Board examined the expansion of government-backed mortgages during the postwar years and found that gaining access to homeownership appeared to influence whether, and when, Americans had children.
Their research suggests that the effect was substantial. For every 1,000 additional mortgages issued through government programs, roughly 300 more babies were born the following year, Dr. Kearney told The New York Times.
“This mortgage program was not meant as a pronatalist policy, but it seems to have had that effect.”
The finding, published in its final version by the National Bureau of Economic Research in September, comes as policymakers worldwide struggle to understand historically low fertility rates. Governments have experimented with tax credits, paid maternity leave, subsidized childcare and other incentives intended to make parenthood more financially manageable. So far, none has produced a major or sustained turnaround.
Dr. Kearney and Dr. Dettling approached the question by looking back at one of the most dramatic fertility increases in modern American history.
The baby boom began in 1946 after World War II ended. Over the following decade, births climbed sharply. By 1957, the total fertility rate had reached about 3.7 children per woman, roughly 30 percent higher than at the beginning of the boom and a modern American high.
Scholars have spent decades trying to explain what drove that surge. Some theories focus on the economic optimism Americans felt after years of depression and war. Others have pointed to falling maternal health risks, shifting marriage patterns or broader improvements in living standards.
Notably, at the same time, another sweeping change was underway; Americans were becoming homeowners in far greater numbers.
The G.I. Bill and related federal programs gave millions of returning veterans access to mortgages with unusually favorable terms, including low or nonexistent down payments. The programs helped reshape American housing and played a major role in the growth of the postwar middle class.
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Young adults were among the biggest beneficiaries. Among Americans of childbearing age, the homeownership rate rose from about 20 percent in 1940 to 50 percent by 1960.
Dr. Kearney and Dr. Dettling set out to determine whether the parallel rise in homeownership and fertility reflected more than coincidence. Answering that question required detailed information about where and when government-backed mortgages had actually been issued, rather than simply comparing national housing and birth trends.
The researchers eventually discovered that the Federal Reserve had preserved thousands of pages of historical mortgage records.
Undergraduate research assistants spent two years digitizing the material. The researchers then matched those records with state-level demographic data to examine whether increases in federally backed lending were followed by changes in births.
“We kept cutting the data and looking at it,” Dr. Kearney said. “It kept lining up.”
The analysis found that places receiving more government-backed mortgages subsequently recorded additional births, suggesting that expanded access to homeownership contributed to the baby boom.
It was not, however, a complete explanation for the era’s fertility surge. Black women also experienced increases in childbearing during the baby-boom years, despite Black families being unfairly excluded from many of the housing benefits made available to white veterans and their families.
The findings may also help explain broader demographic changes at the time. Women married younger, began having children earlier and ultimately tended to have larger families than women in preceding generations.
According to Dr. Kearney, the apparent effect was not simply about making housing cheaper. Instead, the researchers argue that ownership itself may have mattered.
Having a deed in one’s name can provide both financial security and a sense of permanence, potentially making people more confident about starting or expanding a family. Younger adults today also frequently cite financial and housing stability as milestones they hope to reach before having children.
That interpretation complicates a longstanding argument about America’s declining birthrate.
Economists have often been skeptical that financial strain alone can explain the roughly two-decade decline in fertility. Household incomes have generally risen over that period, while lower-income women have historically tended to have more children than higher-income women.
The study suggests the economic connection may instead be tied to whether people feel settled enough to make long-term decisions about family life.
The median age of first-time home buyers reached 40 in 2025, a record high. Mortgage rates also jumped to 7 percent last week, their highest level since January 2025, creating another hurdle for prospective buyers already contending with elevated home prices.
Affordability has consequently become an increasingly prominent political issue during the midterm election cycle, with housing costs occupying a central place in broader debates over the cost of living.
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Still, researchers caution against assuming that a housing policy associated with higher fertility several generations ago would produce an identical result under present-day conditions.
Phillip Levine, an economics professor at Wellesley College who has previously written papers with Dr. Kearney but was not involved in the new research, said the study’s methodology appeared convincing.
“The empirical work seems pretty strong, and they find a pretty good-sized effect,” he said.
But he noted that the social and economic conditions surrounding housing and family formation have changed substantially since the mid-20th century.
“Does that mean that we would get the same result today? We don’t know.”
Dr. Kearney similarly acknowledged that the modern housing market presents challenges that did not exist in the same form during the postwar period.
Making mortgages easier for young families to obtain could encourage some people to have children sooner or ultimately have more children. But the housing market itself is far different from the one that accompanied the baby boom.
The United States of the 1940s and 1950s was rapidly adding homes, particularly as suburbs expanded and large amounts of land around metropolitan areas were developed. Housing supply today is considerably more constrained in many parts of the country.
Expanding access to mortgage credit without also increasing the number of available homes could therefore worsen affordability by pushing prices even higher.
That tension, Dr. Kearney said, is one of the central problems policymakers would have to address if they tried to draw lessons from the postwar experience.
The research does not suggest that government-backed mortgages created the baby boom on their own. But it adds another dimension to the debate over why Americans are delaying or forgoing parenthood, suggesting that the stability associated with homeownership may have historically played a larger role in family formation than economists previously recognized.
Moumita Basuroychowdhury is a Contributing Reporter at The National Digest. After earning an economics degree at Cornell University, she moved to NYC to pursue her MFA in creative writing. She enjoys reporting on science, business and culture news. You can reach her at moumita.b@thenationaldigest.com.
