The largest twentieth-century increase in US home ownership
occurred between 1940 and 1960, associated largely with declining
age at first ownership. I shed light on the contribution of coincident
government mortgage market interventions by examining home
loan benefits granted under the World War II and Korean War GI
Bills. Veterans' benefits increased home ownership rates primarily by
shifting purchase earlier in life, explaining 7.4 percent of the overall
1940-1960 increase, and 25 percent of the increase for affected
cohorts. A rough extrapolation suggests that broader changes in
mortgage terms can explain 40 percent of the 1940-1960 increase.
(JEL G21, N22, N92, R21, R31)
Fetter, Daniel K.
"How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-Century GI Bills."
American Economic Journal: Economic Policy,
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Economic History: Financial Markets and Institutions: U.S.; Canada: 1913-
Regional and Urban History: U.S.; Canada: 1913-
Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
Housing Supply and Markets