The Global Financial Crisis was caused by a housing bubble that deflated rapidly. Using data from Moody’s Analytics, Freddie Mac, Yahoo Finance and the Federal Reserve, we created visualizations that highlight the evolution of the housing market in the United States and North Carolina in the ten years preceding the onset of the crisis.
After 2000, home price appreciation in the U.S. outpaced that in North Carolina by a considerable degree. This result was likely influenced by North Carolina’s enactment of an anti-predatory lending law in 1999, which cracked down on undesirable lending abuses. As several of our oral history interviews suggest, this law reduced the availability of mortgage credit in North Carolina, thereby dampening one of the main accelerants of home price appreciation. U.S. and North Carolina home prices peaked in 2006 and 2007 respectively, with the subsequent decline being less severe in North Carolina.
Historically, the North Carolina homeownership rate has exceeded the broader U.S. homeownership rate. In addition, North Carolina’s homeownership rate demonstrates no discernible trend in the years leading up to the crisis, whereas the U.S. rate steadily increases into 2006. In fact, North Carolina’s homeownership rate peaked in 1999, further evidence of the anti-predatory lending law’s impact on credit availability. Once the housing bubble burst, the homeownership rate in North Carolina and the rest of the country steadily declined, and they remain well below their pre-crisis peaks.