Well Worth Saving: How the New Deal Safeguarded Home Ownership

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 a popular New Deal relief program, the Home Owners’ Loan Corporation (HOLC ), was able to stem foreclosures by buying distressed mortgages from lenders and easing the terms for borrowers. 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 ’30s. Presenting the stories of those involved, the book offers a clear understanding of the HOLC within the context of the market in which it operated and explores how incentives and behaviors at play during crises influence the effectiveness of policy.
More than eighty years after the start of the Great Depression, when politicians have called for similar programs to address current challenges, this accessible account of the Home Owners’ Loan Corporation holds invaluable lessons for our own time.