The Housing Industry & the U.S.

Economy 1

The Housing Industry & the U.S. Economy

Celia Meldrum

Economics 1740

Salt Lake Community College

The Housing Industry & the U.S. Economy 2

Housing in the U.S. has changed and evolved throughout every era of the history of our

country. As the economy changes, so have the rules and regulations of the housing industry.

Are we now headed towards another crisis? The government has worked to establish laws to

prevent repeats in history, but will the current; ever rising prices, not end in some kind of disaster

at some point?

During the Colonial Era (1607-1776) settlers were just arriving from many other parts of

the world, like England, France, and Spain. Within a few decades, there were successful

colonies established and the people needed homes to live in. The homes they built included

types like the one that is pictured here.

Bing.com outdoor

The main thing that they did have was desire to succeed. They had tools, abilities,

and a desire to create a life in the New World. Most of them had spent months travelling here,

and most families had lost loved ones in their travels. A lot of the travelers did not even have

the money for the fare, so they had indentured themselves to pay for the journey. They faced

years of working for someone else, basically as a slave, to pay for their transport. The people

who could afford a home had to pay or trade for the materials, as there were no banks to

borrow the money from and then pay back later. There were specialists in many of the
The Housing Industry & the U.S. Economy 3

construction processes and people would hire help to handle such things as the woodwork or the

stonework. During this period of time the history of our country there was never enough money.

The English pound was used as a standard commerce was extremely difficult.

As we move into The Revolutionary, Early National, and Antebellum Eras

(1776-1860), the housing and the environment that people lived in was shifting somewhat.

There were mills and more finished wood was used in the construction process. The frontier was

bing.com U.S.Homes

moving westward, and most believed in a bright future for themselves and their families.

The next era that our country experienced, was labeled The Reunification Era (1860-

1920), by this period in time some of the housing was becoming fancier and larger than those

built in previous decades.

The Housing Industry & the U.S. Economy 4

bing.com Victorian House

The history of the economy and the homes built in the 1914-1946 time period is tied to

the Wars that were fought, and a Depression that left many destitute. There was great cost to all,

not only in money, but in lives lost. However, this was also the period that most homes now had

electricity and the government determined during this period to step in and back mortgage loans

for a 30 year period.

bing.com.wordpress

Finally bringing us from 1946 to the present, there have been many changes in housing

and finance during this time. This period has seen the most change in laws and government

entities (FHA, HMDA, USDA, VA, CFPB!!) regarding mortgage loans. The Great Recession

saw many lose their homes, their jobs, and their life savings.
The Housing Industry & the U.S. Economy 5

bing.com nydailynews

The housing market and the financial markets have seen drastic changes in costs, interest

rates, and lending rules. As seen in the graph below the history has definitely been an interesting

one to follow.
The Housing Industry & the U.S. Economy 6

Robert Shiller is an American Nobel Laureate, economist, academic, and bestselling

author. In his article, titled Why Do Cities Become Unaffordable, Schiller states that inequality

can be measured by the affordability of homes across cities. The rising costs in some cities are

forcing people to make the decision to leave a community that has been their home for their

entire life.

We now have many government regulations around the mortgage industry. Fannie Mae

and Freddie Mac are trying to get banks to buy back bad loans. How did we get to that place

again, with all of the rules we have now to even acquire a mortgage in the first place?

Where will the future take us? Will the American dream of owning a home, a white

picket fence, two kids and a dog continue to be a reality for most, for some, or just a dream for

all of us?

References

Walton, Gary M, Rockoff, Hugh. History of the American Economy 11E, Cengage

Passage To America, 1750, EyeWitness to History, www.eyewitnesstohistory.com (2000).

Walbert, D. (n.d.). 6.5 The value of money in colonial America. Retrieved December 10, 2017,
from http://www.learnnc.org/lp/editions/nchist-colonial/1646

Robert J. Shiller. Why Do Cities Become Unaffordable? by Robert J. Shiller. Retrieved

December 10, 2017, from https://www.project-syndicate.org/commentary/real-estate-prices-
housing-inequality-by-robert-j--shiller-2017-07?barrier=accessreg

Bing homepage. (n.d.). Retrieved December 10, 2017, from

https://www.bing.com/images/search.outdoor.com

Bing homepage. (n.d.). Retrieved December 10, 2017, from

https://www.bing.com/images/search.U.S.Homes
The Housing Industry & the U.S. Economy 7

Bing homepage. (n.d.). Retrieved December 10, 2017, from

https://www.bing.com/images/search.Victorian Home. 1888

Bing homepage. (n.d.). Retrieved December 10, 2017, from

https://www.bing.com/images/search.Ny Daily News 2017

Schiller, R. (2006, July). Bing homepage. Retrieved December 10, 2017, from
https://www.bing.com/images/search. wordpress.com