Working Paper: NBER ID: w16245
Authors: Charles Courtemanche; Kenneth A. Snowden
Abstract: 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.
Keywords: HOLC; mortgage crisis; housing markets; homeownership
JEL Codes: E44; G01; G18; G21; G22; G28; N22; N62; N92; R31; R51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| HOLC lending (G21) | median home values (R31) |
| HOLC lending (G21) | homeownership rates (R21) |
| HOLC lending (G21) | new housing construction (R31) |
| distance from nearest HOLC office (R38) | HOLC treatment intensity (I11) |
| HOLC treatment intensity (I11) | median home values (R31) |
| HOLC treatment intensity (I11) | homeownership rates (R21) |