Homeowners use some of that newfound wealth, according to evidence that Dettling and Kearney cited, “to fund their childbearing goals.” Similarly, a recent paper by Purdue University economist Keith Mumford and Cornell’s Michael Lovenheim concludes that the “large recent variation in the housing market could have sizable demographic effects that are driven by the positive effect of housing wealth on fertility.”

These days, this bodes poorly for the birth rate—and for the economy. The drop in home values from 2006 to 2010, Dettling and Kearney found, corresponded to a 4.3 percent decline in births. And when housing prices plummet, as they have since the real-estate bubble burst in 2007, homeowners spend a lot less. This goes far to explain why the U.S. economy has struggled to regain its stride after the Great Recession and also why the Obama administration—after years of fumbled efforts to help stabilize the housing market—released a proposal this week to help underwater homeowners refinance their mortgages at lower rates.

Prices continue to decline nationwide, according to the Case-Shiller housing index released this week—and so does the birth rate. After reaching a recent peak of 2.1 babies per woman in 2007, the nation’s fertility rate has shrunk to 1.9 babies per woman, according to the Census Bureau. The states where prices have plunged the most—led by Nevada, Arizona, and Florida—have also seen their fertility rates fall more sharply than in any other state.

This baby bust isn’t an emergency—yet. U.S. fertility rates sank even lower through much of the 1970s and 1980s. But if housing prices and birth rates keep sliding, the nation’s economy would suffer down the road.