ABSTRACT
This chapter examines the workings of local housing markets and the Housing and Urban Development (HUD) and non-HUD programs that support them by facilitating the critical flow of mortgage credit. It looks at the bewildering array of HUD programs for subsidizing housing for the poor and near poor. The chapter describes the record of the housing market's cyclical behavior and examine the causes and also looks at the unhappy consequences and discuss HUD's attempts to curb the chronic and hard-to-cure malady. Many studies confirm the cyclical character of housing starts. Since World War II there have been six clearly distinct swings in housing production. The key factor that explains the striking relation between downturns in housing production and periods of tight credit lies in the different effect that high interest rates have on various users of credit. The relationship between low housing production and tight money is greatly affected by another fact.
