1. The Federally Guaranteed Mortgage
While the American dream still eludes some, the fact remains that only a privileged few owned their own home in the 1800s. Then came the amortized mortgage in the 1920s, "a critical financial change," says Joel Tarr, of Carnegie Mellon University in Pittsburgh. The financial incentives continued to build with the creation of the Federal Housing Authority in 1934, and in 1944 came the Servicemen's Readjustment Act (the G.I. Bill), which made it possible for vets to obtain guaranteed home loans. That, in turn, evolved into what was perhaps the most important home-buying stimulus of all: the tax-deductible mortgage. "Suddenly, with little or no money down and low interest rates, a whole generation of Americans could obtain a piece of the dream," says the National Museum of American History's Bill Yeingst. "Everything combined really stimulates the market," agrees Carolyn Goldstein. "The creation of the federally guaranteed mortgage is what explains the skyrocketing of residential development, even in postwar America." Such economics should continue to fuel the housing market into the coming century.
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