The doctrine of the virgin birth of Jesus, so central to the traditional Christmas story, was not part of the teaching of the first Christians, whom it should be remembered, also remained within the Jewish faith (Luke 24:52-53). The apostle Paul makes no reference to the virginal conception by the mother of Jesus when speaking of Jesus' origins and divinity. His epistles were written during the 50's A.D. and predate all of the four gospels. Although Paul never met Jesus (who died about 30 A.D.), he personally did know James, the brother of Jesus. Yet despite this eye-witness link to Jesus, Paul apparently knows nothing of the virgin birth, for he states only that Jesus was "born of a woman" (Galatians 4:4) and was "descended from David, according to the flesh" (Romans 1:3), thereby implying a normal birth.

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They appear to be legends recorded by later Jewish-Christian apologists who were attempting to explain the origins of a man whom they considered divine. In this sense, the authors employed the familiar Jewish practice of the time known as "midrash" to illustrate and prove their points; that is to say, they liberally interpreted and expanded on texts and prophesies in the Jewish scriptures. The miraculous birth stories also served other purposes, namely, to rebut the contemporary inferences about the illegitimate birth of Jesus (Matt. 1:18-19, Mark 6:3, John 8:41) and to counter charges that he was possessed by the devil, rather than the spirit.

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In ancient times it was often claimed that important people had miraculous births. Plato was said to have been born by the union of the god Apollo with his mother. Likewise, Alexander the Great was said to have been conceived when a thunderbolt fell from heaven and made his mother Olympias pregnant before her marriage to Philip of Macedon. In the book of Genesis we read that sons of gods had intercourse with women to produce heroes (Gen. 6:4). Even the recently discovered Dead Sea Scrolls tell of the miraculous birth of Noah and how his father Lamech was suspicious that his wife had been made pregnant by an angel. Also the writings of Philo of Alexandria, who was born about 20 B.C., contain evidence that some Jews of the period were speculating about miraculous births of religious heroes. Philo relates how Hebrew notables such as Isaac and Samuel were conceived by barren women by the intervention of the divine Spirit.

Reference: "Myths surrounding Jesus' birth," as interpreted by Progressive Christians.

The above article provides additional details regarding discrepancies between the stories regarding Jesus' birth in the various canonical gospel stories.

The unknown author of the Gospel of Matthew, probably writing near the end of the first century A.D., appears to have felt the need to claim a virginal birth for his messiah claimant to make him a fulfilment of an Old Testament prophecy based on a mistranslation of the Hebrew word "almah".

In addition, the author of Matthew uses a mistranslation of an Old Testament prophecy to reinforce his belief in the virgin birth. He quotes from Isaiah, "therefore the Lord himself shall give you a sign; behold, a virgin shall conceive and bear a son, and shall call his name Immanuel" (Isaiah 7:14). The original Hebrew text of Isaiah uses the word "almah" which refers to a young woman of marriageable age, not the word "bethulah" which means virgin. However, the author of Matthew was using the Septuagint, the Greek translation of the Hebrew scriptures. It inaccurately used the Greek word "parthenos" for "almah", thereby strongly implying virginity. The actual text of Isaiah, however, makes no reference to a virgin becoming pregnant other than by normal means. Some modern translations of the Bible, which are based on the original Hebrew text, replace the word "virgin" with the more accurate translation, "young woman".

Reference: "Myths surrounding Jesus' birth," as interpreted by Progressive Christians.

Also, the early Christians were competing against a number of other religions, so likely felt it necessary to attribute a virginal birth to their God-man, so that he would not be less impressive than the deities of competing religions. Many writers have found parallels between the virgin birth story in the New Testament and virgin birth myths of other religions existing at the time of Christianity's formation. Just as the Old Testament stories incorporate elements from other cultures the Hebrews encountered, such as the Assyrians, Babylonians, Sumerians, Zoroastrians, etc., through trade or by being conquered by those other cultures, e.g., the Assyrians conquered the northern portion of the Kingdom of Israel and the Babylonians later conquered the southern portion as well, it shouldn't be surprising that Christian writers would incorporate the mythology of other religions of their time into stories that would later become part of the New Testament.

...As Christian preachers met and talked with devotees of the cult of Asclepius, and with those who were familiar with the rites and the mythology of the cult, how could they escape attributing to their hero all the marks of divine attestation that were applied to the divinity of this competitive religion? It is not too difficult to understand how the Christian movement could have acquired a virgin birth tradition, if one had not been previously established. It would be extremely difficult to understand how it could have escaped such acquisition, when viewed in the light of the environment in which early Christianity made its way, and the manner in which it competed with other religious movements.

Extraordinary similarities existed between the Egyptian cult of Osiris and the Greek cult of Dionysus which made possible the merging by the Ptolemies of the two religions into the syncretistic cult whose chief god was Serapis. The worship of Serapis, retaining as it did the values of the Egyptian and Greek cults which is superseded, was spread far and wide over the Graeco-Roman world,a s the result of an intensive missionary propaganda. Not only was the cult syncretistic in origin, but it retained its adaptable character, and continued to absorb other religions and other gods. Missionaries of Christ must have confronted missionaries of Serapis in the first century frequently, and it is likely that among Christian converts could have found those who knew the rites and the myths of this syncretistic cult.

In the cult lore connected with both the Egyptian and the Greek religions which were merged into the cult of Serapis is found a well-formulated story of a miraculous birth. In connection with the Egyptian cult, Plutarch gives us an account of the divine birth of Osiris, and in connection with the Greek cult, there is evidence that one act in the Elsusinian mysteries was the union of Zeus and Demeter, and the birth of the wonder child Dionysus.

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The agreement in detail between the two religions, even with regard to the miraculous birth of the hero, was recognized by Justin Martyr, who seemed to have a difficult time explaining the cause for these agreements. If a Christian missionary in the first century brought his Christian message to those who were already familiar with the myths connected with the cult of Dionysus or Osiris or the syncretistic Serapis, he would want to give his divinity credentials that would appeal to his listeners and attract them to the service of Christ. Could he say any less of the manner in which his hero entered this life than which was already being said by his competitors of their divinity? It would be difficult. The least he could do was to claim for his Christ all the merits and credentials which were possessed by Osiris or Dionysus.

If the Christian missionary was genuinely enthusiastic for his faith, and we may be sure that he was, it is difficult to see how he could refrain from guaranteeing that Jesus was a divinely-begotten, miraculously-born individual. And while making this claim, he was thoroughly convinced of the truth of his statement. When it is clearly realized that the controlling factor in propaganda is the mind of the persons to whom the propaganda is directed, and the Christian missionary message in the first century is viewed over against the background of Hellenistic religions, with their myths of divinely-begotten heroes, the process of bringing a virgin birth story into Christian mythology is seen to be a normal and natural one.

The Virgin Birth: Mystery Or Myth? by J. R. Longsdorf, pages 54-55