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*From** Debtor Nation: The History of America in Red Ink* Borrowers unable to pay off the principal on their balloon mortgages faced foreclosures. Foreclosures during the Depression resulted as much from the drop in home owner's income as from the withdrawal of short-term mortgage funds from the market, making refinance impossible. By 1933 the mortgage market was effectively dead, and with it the housing industry. "Without mortgages, the housing industry collapsed. Housing investment fell from $68 billion in 1929 to $17.6 billion in 1932. By 1934, the construction industry, as a whole, was one-tenth the size it had been in the late 1920s.Wage earners from a third of the families on relief were employed in construction. Indirectly, the collapse of the housing industry hit other sectors of the economy as well. Construction also had tremendous linkages to other sectors of the economy to a much greater extent than most industries. Ten percent of American factories manufactured building materials for construction. Twenty percent of freight cars carried those materials across the country. Unskilled labor carried material. Skilled labor put it together. Metal and wood of all shapes and types were needed for almost any project. Muscle and machine were needed alike. Clearly, restoring the economy turned on restoring the construction industry. What was less certain was how to bring about new construction. New Deal policymakers focused on the housing industry in their efforts to restart the economy because it had fallen so hard and so fast. ... "In 1932 and 1933, lenders foreclosed on half a million homes." http://www.delanceyplace.com/view-archives.php?p=3110 _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
