Well Worth Saving

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 ’30s. 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 Home Owners’ Loan Corporation holds invaluable lessons for our own time.

Price Fishback is the Thomas R. Brown Professor of Economics at the University of Arizona and a research associate of the NBER. He is the author or editor of several books, including A Prelude to the Welfare State and Government and the American Economy, both also published by the University of Chicago Press. He lives in Tucson, AZ. Jonathan Rose is an economist with the Federal Reserve Board of Governors and lives in Washington, DC. Kenneth Snowden is associate professor of economic history at the University of North Carolina at Greensboro and a research associate of the NBER. He lives in Greensboro, NC.

— Kris James Mitchener, Santa Clara University

— Paul Willen, Federal Reserve Bank of Boston

— Choice

— Economic History Review

— Journal of American History

— Housing Studies