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The 1920s American Real Estate Boom and the Downturn of the Great Depression: Evidence from City Cross Sections

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  • Michael Brocker
  • Christopher Hanes

Abstract

In the 1929-1933 downturn of the Great Depression, house values and homeownership rates fell more, and mortgage foreclosure rates were higher, in cities that had experienced relatively high rates of house construction in the residential real-estate boom of the mid-1920s. Across the 1920s, boom cities had seen the biggest increases in house values and homeownership rates. These patterns suggest that the mid-1920s boom contributed to the depth of the Great Depression through wealth and financial effects of falling house values. Also, they are very similar to cross-sectional patterns across metro areas around 2006.

Suggested Citation

  • Michael Brocker & Christopher Hanes, 2013. "The 1920s American Real Estate Boom and the Downturn of the Great Depression: Evidence from City Cross Sections," NBER Working Papers 18852, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18852
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    Cited by:

    1. Nanda, Ramana & Nicholas, Tom, 2014. "Did bank distress stifle innovation during the Great Depression?," Journal of Financial Economics, Elsevier, vol. 114(2), pages 273-292.
    2. Gustavo S. Cortes & Marc D. Weidenmier, 2017. "Stock Volatility and the Great Depression," NBER Working Papers 23554, National Bureau of Economic Research, Inc.
    3. Price Fishback & Trevor Kollmann, 2014. "New Multicity Estimates of the Changes in Home Values, 1920-1940," NBER Chapters,in: Housing and Mortgage Markets in Historical Perspective, pages 203-244 National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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