Well Worth Saving: How the New Deal Safeguarded Home Ownership

Well Worth Saving: How the New Deal Safeguarded Home Ownership, by Price Fishback, Jonathan Rose, and Kenneth Snowden, is the latest monograph in the NBER's series on Long-Term Factors in Economic Development.

The urgent demand for housing after World War I fueled a boom in residential construction that led to historic peaks in home ownership. Foreclosures at the time were rare, and when they did happen, lenders could quickly recoup their losses by selling into a strong market. But no mortgage system is equipped to deal with credit problems on the scale of the Great Depression. As foreclosures quintupled, it became clear that the mortgage system of the 1920s was not up to the task, and borrowers, lenders, and real estate professionals sought action at the federal level.

Well Worth Saving tells the story of the disastrous housing market during the Great Depression and the extent to which an immensely popular New Deal relief program, the Home Owners' Loan Corporation (HOLC), was able to stem foreclosures by buying distressed mortgages from lenders and refinancing them. Drawing on historical records and modern statistical tools, Price Fishback, Jonathan Rose, and Kenneth Snowden investigate important unanswered questions to provide an unparalleled view of the mortgage loan industry throughout the 1920s and early 1930s. Combining this with the stories of those involved, the book offers a clear understanding of the HOLC within the context of the housing market in which it operated, including an examination of how the incentives and behaviors at play throughout the crisis influenced the effectiveness of policy.

More than eighty years after the start of the Great Depression, when politicians have called for similar programs to quell the current mortgage crisis, this accessible account of the HOLC holds invaluable lessons for our own time.

Price Fishback and Kenneth Snowden are a Research Associates in the NBER's Program on the Development of the American Economy. Fishback is the Thomas R. Brown Professor of Economics at the University of Arizona. Snowden is an Associate Professor of Economics and Director of Graduate Studies at the University of North Carolina, Greensboro. Jonathan Rose is an economist with the Federal Reserve Board of Governors.

The price of the book is $35.00 for a clothbound volume.