The Influence of the Home Owners' Loan Corporation on Housing Markets During the 1930s

Price Fishback, Alfonso Flores-Lagunes (), William Horrace, Shawn Kantor and Jaret Treber

No 15824, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Problems with mortgage financing are widely considered to be a major cause of the recent financial meltdown. Several modern programs have been designed to mimic the Home Owners' Loan Corporation of the 1930s. The HOLC replaced the toxic assets on the balance sheets of financial institutions by buying troubled mortgages and then refinanced the mortgages to allow home owners to avoid losing their homes. We analyze the impact of the HOLC on the nonfarm rental and owned home markets after developing a new data set for over 2800 counties in the United States. In counties with fewer than 50,000 people, where financial markets were not as well developed as in larger cities, the HOLC's financial interventions helped stimulate the demand for owned housing more than it influenced the supply. In rental markets the HOLC appears to have contributed to an increase in the supply of rental housing that was likely associated the improvement of the balance sheets of lending institutions.

JEL-codes: G28 N12 N42 N9 R31 R38 R51 (search for similar items in EconPapers)
Date: 2010-03
Note: DAE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published as Price V. Fishback & Alfonso Flores-Lagunes & William C. Horrace & Shawn Kantor & Jaret Treber, 2011. "The Influence of the Home Owners' Loan Corporation on Housing Markets During the 1930s," Review of Financial Studies, Society for Financial Studies, vol. 24(6), pages 1782-1813.

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Journal Article: The Influence of the Home Owners' Loan Corporation on Housing Markets During the 1930s (2011)
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