IDEAS home Printed from https://ideas.repec.org/p/fip/fedlwp/2016-007.html
   My bibliography  Save this paper

The Postwar Conquest of the Home Ownership Dream

Author

Listed:
  • Matthew Chambers
  • Carlos Garriga
  • Don E. Schlagenhauf

Abstract

Post-World War II witnessed the largest housing boom in recent history. This paper develops a quantitative equilibrium model of tenure choice to analyze the key determinants in the co-movement between home-ownership and house prices over the period 1940-1960. The parameterized model matches key features and is capable of accounting for the observed housing boom. The key driver in understanding this boom is an asymmetric productivity change that favors the goods sector relative to the construction sector. Other factors such as demographics, income risk, and government policy are important determinants of the homeownership rate but have small effect on house prices.

Suggested Citation

  • Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2016. "The Postwar Conquest of the Home Ownership Dream," Working Papers 2016-7, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:2016-007
    DOI: 10.20955/wp.2016.007
    as

    Download full text from publisher

    File URL: https://research.stlouisfed.org/wp/2016/2016-007.pdf
    File Function: Full text
    Download Restriction: no
    File URL: https://dx.doi.org/10.20955/wp.2016.007
    File Function: https://dx.doi.org/10.20955/wp.2016.007
    Download Restriction: no
    File URL: https://libkey.io/10.20955/wp.2016.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fabrizio Perri & Vincenzo Quadrini, 2002. "The Great Depression in Italy: Trade Restrictions and Real Wage Rigidities," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 128-151, January.
    2. Rosen, Harvey S & Rosen, Kenneth T, 1980. "Federal Taxes and Homeownership: Evidence from Time Series," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 59-75, February.
    3. Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2014. "Did Housing Policies Cause the Postwar Boom in Home Ownership?," NBER Chapters, in: Housing and Mortgage Markets in Historical Perspective, pages 351-385, National Bureau of Economic Research, Inc.
    4. J. E. Morton, 1956. "Introduction to "Urban Mortgage Lending: Comparative Markets and Experience"," NBER Chapters, in: Urban Mortgage Lending: Comparative Markets and Experience, pages 1-13, National Bureau of Economic Research, Inc.
    5. Carl F. Behrens, 1952. "Introduction to "Commercial Bank Activities in Urban Mortgage Financing"," NBER Chapters, in: Commercial Bank Activities in Urban Mortgage Financing, pages 1-13, National Bureau of Economic Research, Inc.
    6. R. J. Saulnier, 1950. "Appendices to "Urban Mortgage Lending by Life Insurance Companies"," NBER Chapters, in: Urban Mortgage Lending by Life Insurance Companies, pages 107-180, National Bureau of Economic Research, Inc.
    7. J. E. Morton, 1956. "Urban Mortgage Lending: Comparative Markets and Experience," NBER Books, National Bureau of Economic Research, Inc, number mort56-1, March.
    8. Yu Zheng & Raul Santaeulalia & Dongya Koh, 2015. "Labor Share Decline and the Capitalization of Intellectual Property Products," 2015 Meeting Papers 844, Society for Economic Dynamics.
    9. R. J. Saulnier, 1950. "Front matter, Urban Mortgage Lending by Life Insurance Companies," NBER Chapters, in: Urban Mortgage Lending by Life Insurance Companies, pages -23--16, National Bureau of Economic Research, Inc.
    10. Dongya Koh & Raül Santaeulàlia‐Llopis & Yu Zheng, 2020. "Labor Share Decline and Intellectual Property Products Capital," Econometrica, Econometric Society, vol. 88(6), pages 2609-2628, November.
    11. R. J. Saulnier, 1950. "Scope of Urban Mortgage Lending by Life Insurance Companies," NBER Chapters, in: Urban Mortgage Lending by Life Insurance Companies, pages 1-19, National Bureau of Economic Research, Inc.
    12. Raford Boddy & Michael Gort, 1973. "Capital Expenditures and Capital Stocks," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 2, number 3, pages 245-261, National Bureau of Economic Research, Inc.
    13. Mankiw, N. Gregory & Weil, David N., 1989. "The baby boom, the baby bust, and the housing market," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 235-258, May.
    14. Carl F. Behrens, 1952. "Commercial Bank Activities in Urban Mortgage Financing," NBER Books, National Bureau of Economic Research, Inc, number behr52-1, March.
    15. Raymond J. Saulnier, 1950. "Urban Mortgage Lending by Life Insurance Companies," NBER Books, National Bureau of Economic Research, Inc, number saul50-1, March.
    16. Saul B. Klaman, 1961. "The Postwar Residential Mortgage Market," NBER Books, National Bureau of Economic Research, Inc, number klam61-1, March.
    17. Carl F. Behrens, 1952. "Appendices and Index to "Commercial Bank Activities in Urban Mortgage Financing"," NBER Chapters, in: Commercial Bank Activities in Urban Mortgage Financing, pages 85-125, National Bureau of Economic Research, Inc.
    18. Albert Chevan, 1989. "The Growth of Home Ownership: 1940-1980," Demography, Springer;Population Association of America (PAA), vol. 26(2), pages 249-266, May.
    19. Saul B. Klaman, 1961. "The Mortgage Market," Journal of Finance, American Finance Association, vol. 16(2), pages 255-260, May.
    20. John P. Herzog & James S. Earley, 1970. "Home Mortgage Delinquency and Foreclosure," NBER Books, National Bureau of Economic Research, Inc, number herz70-1, March.
    21. Pedro Amaral & James C. MacGee, 2002. "The Great Depression in Canada and the United States: A Neoclassical Perspective," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 45-72, January.
    22. Harold L. Cole & Lee E. Ohanian, 2004. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 779-816, August.
    23. Leo Grebler & David M. Blank & Louis Winnick, 1956. "Capital Formation in Residential Real Estate: Trends and Prospects," NBER Books, National Bureau of Economic Research, Inc, number greb56-1, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gonzalo Paz-Pardo, 2024. "Homeownership and Portfolio Choice over the Generations," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(1), pages 207-237, January.
    2. Carlos Garriga & Aaron Hedlund, 2019. "Crises in the Housing Market: Causes, Consequences, and Policy Lessons," Working Papers 2019-33, Federal Reserve Bank of St. Louis.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2014. "Did Housing Policies Cause the Postwar Boom in Home Ownership?," NBER Chapters, in: Housing and Mortgage Markets in Historical Perspective, pages 351-385, National Bureau of Economic Research, Inc.
    2. Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2011. "Did Housing Policies Cause the Post-War Boom in Homeownership? A General Equilibrium Analysis," Working Papers 2011-01, Towson University, Department of Economics, revised Feb 2011.
    3. Don Schlagenhauf & Carlos Garriga & Matthew Chambers, 2012. "The New Deal, the GI Bill, and the Post-War Housing," 2012 Meeting Papers 1050, Society for Economic Dynamics.
    4. Kenneth Snowden, 2014. "A Historiography of Early NBER Housing and Mortgage Research," NBER Chapters, in: Housing and Mortgage Markets in Historical Perspective, pages 15-36, National Bureau of Economic Research, Inc.
    5. Kenneth Snowden & Eugene N. White & Price Fishback, 2014. "Introduction to "Housing and Mortgage Markets in Historical Perspective"," NBER Chapters, in: Housing and Mortgage Markets in Historical Perspective, pages 1-13, National Bureau of Economic Research, Inc.
    6. Jonathan D. Rose, 2011. "The Incredible HOLC? Mortgage Relief during the Great Depression," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(6), pages 1073-1107, September.
    7. Jonathan D. Rose, 2018. "Contract Choice in the Interwar US Residential Mortgage Market," Working Paper Series WP-2018-13, Federal Reserve Bank of Chicago.
    8. Rose, Jonathan D. & Snowden, Kenneth A., 2013. "The New Deal and the origins of the modern American real estate loan contract," Explorations in Economic History, Elsevier, vol. 50(4), pages 548-566.
    9. David A. Price & John R. Walter, 2016. "Private Efforts for Affordable Mortgage Lending Before Fannie and Freddie," Economic Quarterly, Federal Reserve Bank of Richmond, issue Q4, pages 321-351.
    10. Rose, Jonathan, 2021. "Short-term residential mortgage contracts in American economic history," Explorations in Economic History, Elsevier, vol. 79(C).
    11. Daniel K. Fetter, 2013. "How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-century GI Bills," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 111-147, May.
    12. Edgar R. Fiedler, 1971. "Section F: Bibliography," NBER Chapters, in: Measures of Credit Risk and Experience, pages 348-352, National Bureau of Economic Research, Inc.
    13. Cristina Peicuti, 2014. "The Great Depression and the Great Recession: A Comparative Analysis of their Analogies," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(1), pages 55-78, June.
    14. Christopher Foote & Kristopher Gerardi & Lorenz Goette & Paul Willen, 2010. "Reducing Foreclosures: No Easy Answers," NBER Chapters, in: NBER Macroeconomics Annual 2009, Volume 24, pages 89-138, National Bureau of Economic Research, Inc.
    15. John Lintner, 1972. "Finance and Capital Markets," NBER Chapters, in: Economic Research: Retrospect and Prospect, Volume 2, Finance and Capital Markets, pages 1-53, National Bureau of Economic Research, Inc.
    16. Fetter, Daniel K., 2016. "The Home Front: Rent Control and the Rapid Wartime Increase in Home Ownership," The Journal of Economic History, Cambridge University Press, vol. 76(4), pages 1001-1043, December.
    17. Blackwell, Timothy & Kohl, Sebastian, 2017. "Varieties of housing finance in historical perspective: The impact of mortgage finance systems on urban structures and homeownership," MPIfG Discussion Paper 17/2, Max Planck Institute for the Study of Societies.
    18. Steven Gjerstad & Vernon L. Smith, 2013. "Balance Sheet Crises: Causes, Consequences, and Responses," Cato Journal, Cato Journal, Cato Institute, vol. 33(3), pages 437-470, Fall.
    19. Alexander J. Field, 2013. "The Interwar Housing Cycle in the Light of 2001-2011: A Comparative Historical Approach," NBER Working Papers 18796, National Bureau of Economic Research, Inc.
    20. Natacha Postel-Vinay, 2014. "Debt Dilution in 1920s America: Lighting the Fuse of a Mortgage Crisis," Working Papers 0053, European Historical Economics Society (EHES).

    More about this item

    Keywords

    Housing finance; first-time buyers; life-cycle;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlwp:2016-007. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anna Oates (email available below). General contact details of provider: https://edirc.repec.org/data/frbslus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.