Price Fishback, Jonathan Rose, and Kenneth Snowden
- Published in print:
- 2013
- Published Online:
- May 2014
- ISBN:
- 9780226082448
- eISBN:
- 9780226082585
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226082585.003.0009
- Subject:
- Economics and Finance, Economic History
The HOLC provided significant relief to individual borrowers and lenders, and also pursued a more general public mission. HOLC officials were determined to stabilize mortgage and housing markets by ...
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The HOLC provided significant relief to individual borrowers and lenders, and also pursued a more general public mission. HOLC officials were determined to stabilize mortgage and housing markets by interrupting the cycle of foreclosures and price declines that caused a downward spiral in the early 1930s. This chapter describes the findings of an econometric analysis of HOLC activity in local housing markets. The evidence shows that on average the HOLC prevented declines in house prices and home ownership outside the nation’s largest cities between 1930 and 1940, but did not affect construction in those markets. The authors identify these effects by using the location of HOLC offices as a source of randomness affecting the allocation of refinance activity. The effect of the HOLC on markets in larger cities is still an open question.Less
The HOLC provided significant relief to individual borrowers and lenders, and also pursued a more general public mission. HOLC officials were determined to stabilize mortgage and housing markets by interrupting the cycle of foreclosures and price declines that caused a downward spiral in the early 1930s. This chapter describes the findings of an econometric analysis of HOLC activity in local housing markets. The evidence shows that on average the HOLC prevented declines in house prices and home ownership outside the nation’s largest cities between 1930 and 1940, but did not affect construction in those markets. The authors identify these effects by using the location of HOLC offices as a source of randomness affecting the allocation of refinance activity. The effect of the HOLC on markets in larger cities is still an open question.
