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

52 Pages Posted: 1 Mar 2013 Last revised: 5 Jan 2022

See all articles by Michael Brocker

Michael Brocker

JetBlue Airways Corp.

Christopher Hanes

State University of New York (SUNY) - Binghamton University - Department of Economics

Date Written: February 2013

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

Brocker, Michael and Hanes, Christopher, The 1920s American Real Estate Boom and the Downturn of the Great Depression: Evidence from City Cross Sections (February 2013). NBER Working Paper No. w18852, Available at SSRN: https://ssrn.com/abstract=2226820

Michael Brocker (Contact Author)

JetBlue Airways Corp. ( email )

27-01 Queens Plaza North
Long Island City, NY 11101
United States

Christopher Hanes

State University of New York (SUNY) - Binghamton University - Department of Economics ( email )

Binghamton, NY 13902-6000
United States

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