For the housing cost argument to be credible, it needs to explain what has changed. Basic necessities, including housing, have consumed the vast majority of people’s incomes until very recently in the developed world. They still do for most people, today, in the global south (where birth rates are also falling). Fiat inflation is undoubtedly eroding real income in the developed world but it is only regressing disposable income towards historic norms, when people were happy to start families. Why will people not start families when they have roughly the same wealth, in real terms, as their greatest generation (great) grandparents? Why are people in the global south, who have never seen Western wealth, also not having children?
For the housing cost argument to be credible, it needs to explain what has changed. Basic necessities, including housing, have consumed the vast majority of people’s incomes until very recently in the developed world. They still do for most people, today, in the global south (where birth rates are also falling). Fiat inflation is undoubtedly eroding real income in the developed world but it is only regressing disposable income towards historic norms, when people were happy to start families. Why will people not start families when they have roughly the same wealth, in real terms, as their greatest generation (great) grandparents? Why are people in the global south, who have never seen Western wealth, also not having children?