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The Housing Market

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The rate of home ownership has risen considerably since the early 1900s, when just 47% of U.S. households owned their homes. It picked up in the 1920s, when strong income growth stimulated the housing sector. During the Great Depression of the 1930s, it fell back to 43% but surged again during the 1940s and 1950s, probably because the home mortgage interest deduction became more useful for minimizing taxes. Although legislated as early as 1913, the deduction did not begin to encourage home ownership until personal income tax rates and brackets were raised significantly and became effective for a much wider segment of the population. Between 1940 and 1990, the homeownership rate rose from 43% to 64.4%.


Suggested citation: "The Housing Market," Federal Reserve Bank of Cleveland, Economic Trends, no. 02-07, pp. 13, 07.01.2002.

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