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The Housing Boom and Bust

4.1  ·  Rating Details ·  987 Ratings  ·  134 Reviews

This is a plain-English explanation of how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust. The creative” financing of home mortgages and the even more creative” marketing of financial securities based on American mortgages to countries around the world, are part of the story of how a financial house o

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Published April 21st 2009 by Blackstone Audio, Inc. (first published 2009)
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Sep 23, 2009 DKL rated it it was amazing  ·  review of another edition
Sowell's The Housing Boom and Bust is a thorough and scathing analysis of government interference in the housing and lending market, from land-use restrictions to the corrupt influence of Congress over federal regulators to the Community Reinvestment Act to the artificially low interest rates of the Federal Reserve. Sowell convincingly demonstrates that ever-increasing levels of government meddling converted the US home mortgage market -- which had been the most reliably profitable business anyw ...more
Jun 03, 2009 Derek rated it it was amazing  ·  review of another edition
Recommends it for: Everyone
As he always does, Dr Sowell has written the most straight forward, well researched, and honest explanation for the housing and financial situation that we find ourselves in. I work in the mortgage industry and being an economics student, I have found myself reading many books and articles on this subject. This one is by far the best read for an expert and the layman, which would be someone who doesnt fully grasp MBS's and the many new financial instruments that use mortgages as collateral. The ...more
Jun 03, 2009 Toe rated it liked it  ·  review of another edition
Shelves: nonfiction
In his latest effort, Thomas Sowell outlines the origins of the American housing boom and bust in the first decade of the new millennium. The current economic downturn began with the decline in real estate prices and the increase in payment delinquencies and foreclosures. Few people understand the details behind this real estate collapse, which led to a consumption slowdown, which led to the stock market collapse and relatively high unemployment. Sowell draws on his economic background, conserva ...more
Jonathan Mckay
Feb 28, 2015 Jonathan Mckay rated it did not like it  ·  review of another edition
Shelves: capitalist
Have you ever talked with a stranger about relationships? Sometimes a normal conversation turns into a diatribe about the stranger's recent divorce and how all relationships are a sham. As you awkwardly pull away, they grab your elbow and plead, spittle landing on your arm, “Promise me you'll never marry! PROMISE!!”

That's what it felt like to read this book.

I wanted to learn more about the housing boom and bust of the 2000s, as part of a larger attempt to understand what it means to own real es
Greg Linster
Oct 04, 2011 Greg Linster rated it really liked it  ·  review of another edition
Thomas Sowell’s book, The Housing Boom and Bust, explores the economics behind the many causes of the recent housing bust. In essence, it’s an accurate account of how we all participated in the housing crisis. Lenders, government entities Fannie Mae and Freddie Mac, builders, local government regulations, local homeowners, government regulators (HUD and bank authorities), the Congress, and presidents each played a part. Sowell rightly points out that the crisis was namely a result of misinformed ...more
Jun 11, 2009 Bernie rated it really liked it  ·  review of another edition
Easy to read, and as usual with Sowell, amazingly illuminating. Sowell convincingly answers many questions. Here are just a few:

* The fact that there was no single cause made it easy to pass blame around.
* Reselling loans to places like Freddie and Fannie gives the initial lender fewer incentives to check closely into borrower qualifications.
* The assumption, proven correct that the government would bail out Freddie and Fannie if they got into trouble meant that bank profit remain privatized wh
Gordon Brooks
Jun 21, 2013 Gordon Brooks rated it really liked it  ·  review of another edition
I agree with almost everything Thomas Sowell says in this book about the role the government played in the run-up of prices and the unsustainable mortgage frenzy that eventually had no option but to collapse.

But as with most writers on this subject, Sowell is so focused on the one issue that he fails to see a few important points.

The first is that The Government did not force banks to make bad loans. Yes, government policies put tremendous pressure on chartered banks to lower lending standards,
Jan 04, 2012 Chris rated it liked it  ·  review of another edition
I've not had a sure sense of what made the financial crisis happen. I've read news accounts, and was vaguely aware of what was a kind of mass mania in the financial markets.

But what under-girded this mania is what Thomas Sowell details in economical prose, competently marshaled facts, and concise and plainly written explanations of key economic indicators.

Sowell's thesis is this: Government policy was the cause of the housing bust. Specifically, its implicit guarantee of Freddie Mac and Fannie
Kevin Cecil
I was driving from Ohio to Utah with my conservative Mormon friend and he asked if we could put on this book. I agreed because I once made a deal with him to read the Book of Mormon if he read People's History of the United States, he finished Zinn while I only got about 3/4 through Book of Mormon, so I figured I owed him some book time. I wasn't very familiar with Sowell, and I'll at least grant him he ties his ideology to stronger research than paranoid such as bloviators Hannity, Beck and Lim ...more
Mar 28, 2016 Rod rated it it was amazing  ·  review of another edition
A short, focussed inquiry into the causes of the financial crisis of 2008. And the causes are not what we've generally been told. Since housing was at the core of the crisis, changes in housing policy under several administrations set the industry up for a catastrophic collapse when neared pulled the entire financial system down with it. Some specific problems:
- Land use laws that drove up housing prices
- The "affordable housing" campaign that did attempted to counter high prices by government
Oct 07, 2010 Marcus rated it really liked it  ·  review of another edition
Sowell's arguments are more complex than this, but if you want the general idea of the book, here it is:

Housing became unaffordable in many cities due to laws that restricted land use and sale.

Fewer people could afford the more expensive homes so government, to promote higher home ownership and end ostensibly racist lending practices, imposed regulations that encouraged, and in some cases, forced lenders to offer loans to under-qualified applicants.

People who couldn't otherwise afford to buy h
Aug 02, 2009 Desiree rated it really liked it  ·  review of another edition
A quick and easy read for anyone wanting to understand how we got into the current economic mess we have all been affected by! Not need to have a prior understanding of economics.

My favorite passage from the book:
"Despite differences of personalities and of the times, the underlying vision of the New Deal and that of the current administration are fundamentally similar. However that vision is conceived or articulated by those who believe in it, it is a vision of the federal government exercisin
Nov 11, 2016 Dominique rated it really liked it  ·  review of another edition
Great Book

[Note: Review transitioned from Barnes & Noble website]

This is a very well written book by the conservative economist Thomas Sowell. That being said, I noticed a little bit of bias in the last two chapters of the book.

What is worth mentioning, from the last chapter, the author felt it necessary, and justifiably, to compare the New Deal to that of the Great Recession in the last chapter. I felt the author leaned continuously on the right in his explanation of why Herbert Hoover ini
Nov 11, 2010 Kim rated it liked it  ·  review of another edition
While I agree with many of Sowell's assertions in regards to systemic problems in the housing market, his bias clearly shows as he somehow manages to portray Wall Street and the bankers as innocent victims of government tyranny. I won't dispute that government has culpability in the problem but act as if private greed didn't play any role is simply ridiculous.

Further, he is convenient in his arguments regarding land use restriction. He is accurate that restrictions impact housing p
Mar 23, 2017 LVRichardson rated it it was amazing  ·  review of another edition
Should be required reading in every high school in the land. Want to know exactly what conditions and circumstances caused the financial crisis of 2008/9?? What or who caused the housing bubble and housing burst? Was it lack of regulation, or too much regulation? Was it the bankers or the politicians? Was it the community organizers, the myth of affordable housing, the bundling of securities, or what?? The answers are spelled out here in detailed and compelling, but simple, argumentation. They a ...more
Despite working at a mortgage hedge fund and having some understanding of how mortgage derivatives work, I had never had a clear understanding of what caused the housing boom, how the proliferation in mortgage products started, how the housing boom went bust, and how the housing bust spread over into the general economy. True to its title, this book talks about the housing boom and housing bust, and not much else.

The Housing Boom and Bust makes clear that, at least in the U.S., housing is an in
Mar 09, 2017 Kyle rated it it was ok  ·  review of another edition
This book started off promisingly, with a well-paced, easy-to-understand explanation of housing markets. I learned a few interesting facts was excited to learn more. Slowly, however, it started sliding downhill. First, there were some racially tinged comments, essentially assuming that racism can't be real because there's no way homo economicus would allow that. Then, he starts to complain about politicians, both broadly and specifically. Some of these complaints had more merit than others, and ...more
Nathan Glenn
Dec 30, 2013 Nathan Glenn rated it it was amazing  ·  review of another edition
This book explains the housing boom and 2008 bust simply enough for any to understand, using solid data. He says that the responsibility and irresponsibility were shared around the table, between both major political parties and among the several important organizations. The author then gives his take on what lessons we can learn from the whole affair.

I found the entire work extremely fascinating. I'd never read anything by Thomas Sowell before, but you can bet I'll be running to the library for
Lucy Pyle
Honestly, I wish I would have read this book before I took my real estate investments class in college. If you are genuinely interested in the financial instruments and the mentality that brought about the 2008 financial crisis... READ THIS.
Feb 22, 2013 Luxorien rated it really liked it  ·  review of another edition
A straightforward free market account of the 2008 recession. It's standard Thomas Sowell, which means it is unabashedly opinionated, elegantly argued and supported by evidence. I would not read just this book if you want to learn more about what happened to the housing market, but Sowell's arguments are worth considering even if you ultimately reject his conclusions.

The basic thrust of the book is this: the causes generally cited for the housing bust were only immediate causes. If you go a bit d
Jun 16, 2009 Rex rated it really liked it  ·  review of another edition
Shelves: non-fiction
Sowell is a libertarian (Hoover Institute) economic scholar who writes with great clarity. Here, he writes a hard-hitting book that attacks a wide range of players involved in the economic crisis. I think it’s safe to wager that this book is probably not on Chris Dodd's or Barney Frank’s favorite-book list.

Broadly speaking, Sowell argues that poor regulation--not a lack of regulation--is responsible for the housing boom and bust and subsequent economic difficulties.

He begins by attacking “smar
Conventional wisdom on the US housing market crash and its subsequent impact on subprime mortgages and hence, global financial markets suggests that this is a case of capitalism gone wrong where the solution is greater government regulation to rein in the excesses of Wall Street. Sowell's book turns this assumption on its head, arguing that it was inappropriate and too much government regulation that was amongst the factors leading to the housing market crash. Local regulations in areas such as ...more
Anna H
Feb 18, 2017 Anna H rated it it was amazing  ·  review of another edition
My choice for Black History Month, as Thomas Sowell is my favorite current events writer.
I’ve been meaning to read this since I bought it the year it was published in 2009. At the time, I was dealing with my own economic problems, trying to find a job outside the collapsing newspaper industry...that's another story, though not much has changed....alas, this got put on the back burner.
Now that I've finished, I am happy to report that although Obama had just taken office when this was published,
Sep 04, 2010 Elizabeth rated it liked it  ·  review of another edition
Shelves: get-again
from the library
I like the part which teaches me how the system works. I don't share many of author's views.
from the library computer:
fromBook News

Sowell (scholar in residence, Hoover Institution, Stanford U.) provides a blunt, straight-talking account of the housing boom and bust that rocked the American economy and the economies of other countries around the world. The author delves into "creative" home mortgage financing and the even more creative selling of financial securities based on
Bojan Tunguz
May 20, 2011 Bojan Tunguz rated it it was amazing  ·  review of another edition
The global economic crisis that started in the late 2008 is considered to be one of the worst ones in decades, perhaps the worst one since the Great Depression. It has started in the United States, but its ramifications have been felt globally, reminding us once again that we live in a very interconnected world. The source of the crisis seems to be rather obscure, and involves many hard to understand factors. Indeed, there is no single effect that can be blamed for the entire crisis, but one fac ...more
Jun 04, 2009 Ben rated it it was amazing  ·  review of another edition
In this read-it-in-a-weekend book, Sowell articulates the general causes of and policies that led up to the current economic crisis and the general flaws that tend to plague government intervention during economic hard times. Sowell's explanation of the mortgage/housing crisis brings together factors reported elsewhere individually, such as the role of "affordable housing" being brought to lower-income neighborhoods starting with the Community Reinvestment Act of 1977 and continuing since, which ...more
May 12, 2011 Lisa rated it really liked it  ·  review of another edition
Shelves: nonfiction
Thomas Sowell, a conservative economist, columnist, and writer lays out the relevant factors in the recent housing boom and bust in his matter of fact tone. In pointing out that there were many factors involved in the housing crisis, Sowell systematically and logically discusses each point in a way that is easy to understand.
A few of the causes Sowell discusses includes: the originator of loans had little incentive to make sure borrowers were qualified because the loans would be packaged up and
Jan 08, 2014 Jimmy rated it really liked it  ·  review of another edition
I learn tremendously every time I read the works of economist Thomas Sowell. This book is no exception. Here Sowell examines the recent housing boom and bust that happened in the late 2000s. Contrary to the opinions of liberal lawmakers and liberal pundits, the burst of the housing bubble is not a case of capitalism left unchecked; the book demonstrate that the boom and bust of the housing market is the result of government regulation and intervention. Sowell begins by documenting how zoning law ...more
Nov 18, 2015 Vince rated it liked it  ·  review of another edition
as with Sowell's earlier book "applied economics" this book started off interesting enough. He provided pretty convincing evidence that laws restricting land use do probably contribute to astronomical housing prices in certain areas such as coastal California, although I hesitate to call it the sole cause of such prices. I would further agree that laws to prevent development are not really fair in the sense that current owners are making decisions effecting land that they don't even own. Even So ...more
Dec 28, 2009 Cheri rated it it was amazing  ·  review of another edition
I expected this to be a dull read. What a surprise! Thomas Sowell does a great job of explaining the politics behind the subprime mortgage mess and how seemingly good ideas ("affordable housing," open space, land use restrictions) contributed to the current economic disaster.

I was surprised to find myself agreeing with many of the author's assertions despite our clear divide in political leanings. While I am still not 100% convinced that free markets would self-regulate to the benefit of all, S
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Goodreads Librari...: Please add/update details 3 14 Mar 23, 2016 06:34PM  
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Thomas Sowell is an American economist, social commentator, and author of dozens of books. He often writes from an economically laissez-faire perspective. He is currently a senior fellow of the Hoover Institution at Stanford University. In 1990, he won the Francis Boyer Award, presented by the American Enterprise Institute. In 2002 he was awarded the National Humanities Medal for prolific scholars ...more
More about Thomas Sowell...

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“The traditional fixed-rate 30-year mortgages, which were once a majority of all mortgages, were no longer a majority during the housing boom, as ARMs and other “creative” ways of financing the purchase of a home grew rapidly to cope with soaring housing prices. Such innovative mortgages quickly went from being rare to becoming common, especially in places with very high housing costs.” 1 likes
“Including the differential mortgage loan approval rates between Asian Americans and whites shows that the same methods to conclude that that blacks are discriminated against in mortgage lending would also lead to the conclusion that whites are discriminated against in favor of Asian Americans, reducing this whole procedure to absurdity, since no one believes that banks are discriminating against whites..."[W]hen loan approval rates are not cited, but loan denial rates are, that creates a larger statistical disparity, since most loans are approved. Even if 98 percent of blacks had their mortgage loan applications approved, if 99 percent of whites were approved than by quoting denial rates alone it could be said that blacks were rejected twice as often as whites.” 1 likes
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