The Interwar Housing Cycle in the Light of 2001-2011: A Comparative Historical Approach

66 Pages Posted: 21 Sep 2011 Last revised: 9 May 2015

See all articles by Alexander J. Field

Alexander J. Field

Santa Clara University - Leavey School of Business - Economics Department

Multiple version iconThere are 2 versions of this paper

Date Written: September 20, 2011

Abstract

This paper examines the interwar housing cycle in comparison to what transpired in the United States between 2001 and 2011. The 1920s experienced a boom in construction and prolonged retardation in building in the 1930s, resulting in a swing in residential construction’s share of GDP, and its absolute volume, that was larger than what has taken place in the 2000s. In contrast, there was relatively little sustained movement in the real price of housing between 1919 and 1941, and the up and down price movements were remarkably modest, certainly in comparison with more recent experience. The paper documents the higher degree of housing leverage in 2001-2011. And it documents a rate of foreclosure on residential housing post 2006 that is likely higher than during the 1930s. It concludes that balance sheet problems resulting from a prior residential housing boom pose greater obstacles to recovery today than they did in the interwar period.

Keywords: Housing Cycle, Great Depression, Great Recession

JEL Classification: E32, N12

Suggested Citation

Field, Alexander J., The Interwar Housing Cycle in the Light of 2001-2011: A Comparative Historical Approach (September 20, 2011). Available at SSRN: https://ssrn.com/abstract=1931384 or http://dx.doi.org/10.2139/ssrn.1931384

Alexander J. Field (Contact Author)

Santa Clara University - Leavey School of Business - Economics Department ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States
408 554 4348 (Phone)
408 554 2331 (Fax)

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