Repairing a Mortgage Crisis: HOLC Lending and its Impact on Local Housing Markets
The Home Owners' Loan Corporation purchased more than a million delinquent mortgages from private lenders between 1933 and 1936 and refinanced the loans for the borrowers. Its primary goal was to break the cycle of foreclosure, forced property sales and decreases in home values that was affecting local housing markets throughout the nation. We find that HOLC loans were targeted at local (county-level) housing markets that had experienced severe distress and that the intervention increased 1940 median home values and homeownership rates, but not new home building.
Snowden is corresponding author. We thank Price Fishback, Stephen Holland, and seminar participants at the University of North Carolina Greensboro, the St. Louis Federal Reserve and the 2010 ASSA Meetings for comments and suggestions. We also thank David Cornejo, Diana Liu, Anders Olson, and Spencer Snowden for assistance in assembling the data. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Courtemanche, Charles & Snowden, Kenneth, 2011. "Repairing a Mortgage Crisis: HOLC Lending and Its Impact on Local Housing Markets," The Journal of Economic History, Cambridge University Press, vol. 71(02), pages 307-337, June. citation courtesy of