More than 1,000 schools closed in 2025, according to a new report from Realtor.com. Data from the Institute of Education Sciences suggest that the average annual number of closures was even higher during the school years 2010-11 through 2021-22.
While schools might close for any number of reasons, a common side effect of school closures is an impact on home prices in the neighborhoods they served.
How School Performance Affects Home Prices
Countless studies show that parents happily pay a premium when they buy a home in an attendance zone for a highly performing school. As long ago as 1999, Sandra E. Black, then an academic at Harvard, now at Columbia, wrote in a paper, "I find that parents are willing to pay 2.5 percent more [for a home] for a 5 percent increase in test scores."
More recently, an Opendoor report, School Quality and Home Prices: The 2025 Market Analysis, suggested, "Homes near highly rated schools command premiums of 10% to 50%."
A third study, in 2013, was conducted in Tennessee’s Memphis City and Shelby County following consolidation of their school boards into one, followed by six suburbs voting to create their own independent school districts. All this disruption allowed researchers from Rhodes College (Memphis) and the University of Southern California enough variables to do side-by-side comparisons.
"The major findings replicate previous studies in that a 1 standard deviation increase in state test scores increases housing prices by 4 percent," said a Thomas B. Fordham Institute analysis of the study. The study then went on to claim that an improvement of 1 standard deviation in ACT scores caused housing prices to rise by 2.5%, while the same improvement to graduation rates bumped up prices another 1%.
Parents Want Their Kids in Good Schools
Those studies are useful because they measure the average impact nationwide of school performance on home prices. But pretty much every real estate agent in the country — plus millions of parents — know just how much value it adds to a home to be within a top-performing school's attendance zone.
In the 2016 reissued edition of their book, "The Two-Income Trap: Why Middle-Class Parents Are (Still) Going Broke," authors Elizabeth Warren (yes, the now senator) and Amelia Warren Tyagi wrote:
"And so it was that middle-class families across America have been quietly drawn into an all-out war … Their war has received little coverage in the press and no attention from politicians, but it has profoundly altered the lives of parents everywhere, shaping every economic decision they make. Their war is a bidding war…[in which] millions of parents joined in the search for a house on a safe street with a good school nearby. Over time, demand heated up for an increasingly narrow slice of the housing stock…[with parents] competing furiously with one another for the most important possession: a house in a decent school district."
What's Causing School Closures?
"The U.S. fertility rate is at an all-time low, according to recent data from the Centers for Disease Control and Prevention," reported PBS in April. "Researchers say this is part of a larger downward trend. Since 2007, the number of Americans having babies has dropped 23%, well below the replacement level, meaning not enough are being born to replace those who die."
In previous years, population numbers have been boosted by migrants entering the country. "The slowdown in U.S. population growth is largely due to a historic decline in net international migration, which dropped from 2.7 million to 1.3 million in the period from July 2024 through June 2025," said Christine Hartley, assistant division chief for Estimates and Projections at the Census Bureau, in a news release in January.
Hartley then wrote that since births and deaths were relatively consistent across the years, the slower growth rate was primarily the result of a decline in international migration.
Falling School Enrollment Numbers
This slowing in population growth is, naturally enough, translating into lower enrollment numbers in schools. Last month, Georgetown University's FutureEd department updated its analysis of enrollment numbers.
"Between fall 2019 and fall 2024, enrollment fell from 50.8 million to 49.4 million, a loss of more than 1.4 million students, or 2.8 percent, in just six years," said the FutureEd report. "The Covid-19 pandemic accelerated the decline, erasing more than a decade of modest national growth. But enrollment was already falling in some grades and communities before the pandemic, driven by factors including falling birth rates and shifting family preferences."
This trend will likely continue, as the National Center for Education Statistics (NCES) estimates public school enrollment will drop below 47 million by 2030.
The Covid pandemic saw many parents homeschooling their children, and many never came back to school, according to FutureEd. It reports 3.4% of all students were schooled at home by fall 2022, compared with 2.8% at the same time in 2019.
Meanwhile, enrollments in private schools also increased, up by 28% by the end of the pandemic. Those schools tended to reopen earlier than public ones.
Economic Realities
FutureEd also explains the economic reality behind why so many schools closing. "In most states, public school funding is directly tied to enrollment. When students leave, or are never enrolled, schools lose per-pupil state dollars, which typically account for around 45 percent of their budgets."
"Yet many operating costs, such as school administration, building maintenance and utilities, remain fixed. Federal Covid relief funds temporarily masked the strain, but with those funds now expired, many schools are feeling the pressure," continued FutureEd.
Meanwhile, as we've discussed here several times this year, many seniors are now choosing to age in place rather than downsize. And that means that large family homes that used to send one, two, three, or more kids to local schools are now sending none.
In neighborhoods where this is a common occurrence, it's easy to see the threat to local school enrollments. The demand for children's education in what essentially become retirement areas is small.
The Future
The trends that cause school closures tend to be growing rather than shrinking. The U.S. fertility rate is falling, immigration restrictions and mass deportations are increasing, and consequently school rolls are reducing.
Of course, this isn't the case everywhere in the country. FutureEd identified 10 states, mostly in the South and Midwest, where school enrollments are still rising.
However, that leaves 40 states with shrinking school enrollment rates. And that could have real implications for some homeowners' equity stakes.
