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Fixing the Housing Market: Financial Innovations for the Future
Feb 01, 2012

Franklin Allen, James R. Barth and Glenn Yago

Available from FT Press, Barnes & Noble and Amazon.com


The same tool that many blame for the current housing slump is actually the key to facilitating a more stable and sustainable financing system for housing: financial innovation.

Ever since the ancient Greeks, financial innovation has enabled more people to purchase homes. Today is no different: in fact, responsible financial innovation is now the best tool available for rebooting crippled housing markets, improving their efficiency, and making housing more accessible to millions. This accessible book tells decision makers what they need to know about addressing the challenges and solutions associated with the current housing slump, building on insights into the past and exploring practical development strategies to bridge funding gaps for the future.

Fixing the Housing Market will:

  • Demystify housing finance, showing how financial innovation can overcome information gaps that disrupt housing markets, promote homeownership, and make housing more affordable
  • Help entrepreneurs, economic development specialists and policymakers develop strategies for improving the housing markets in their specific regions
  • Reflect crucial lessons learned in the housing bubble and bust

The authors begin by explaining how housing financial products, services and institutions evolved through the 19th century, World War I, the Great Depression, World War II, and beyond - culminating in the post-1970s era of securitization. Next, they assess housing finance systems in mature economies during and after the recent crisis, highlighting benefits and risks associated with each widely used mortgage funding structure and product. They also assess current housing finance structures in emerging economies such as Brazil, Russia, India and China.

Fixing the Housing Market: Financial Innovations for the Future is available from FT Press, Barnes & Noble and Amazon.com.

This is the second in a series of books on financial innovation, published through a collaboration between Wharton School Publishing/FT Press and the Milken Institute.

What others have said about Fixing the Housing Market: Financial Innovations for the Future:

"This is an engaging, nontechnical, accessible, and cogent set of analyses for fixing the housing market. The authors provide an elegant, compelling, insightful, and timeless evaluation of how to resolve the current housing crisis."
Robert Edelstein, Maurice Mann Chair in Real Estate, Co-Chair, Fisher Center for Real Estate and Urban Economics, Haas School of Business, University of California, Berkeley

"The authors suggest both frameworks and financial tools necessary to fix the troubled markets. The book is clearly and concisely written and useful to all those seeking an integrative and thoughtful assessment of where we go from here."
Stuart A. Gabriel, Professor of Finance and Arden Realty Chair, UCLA Anderson School of Management

"You will not find a more timely and relevant book, and from a team of authors with great expertise ranging from the academic frontier of the study of bubbles to the practical reform of our housing finance system. We really need this clear analysis to help us better understand what often is portrayed as an overly complex topic."
Joe Gyourko, Martin Bucksbaum Professor of Real Estate, Finance and Business & Public Policy, The Wharton School, University of Pennsylvania

"The authors remind us that the current housing finance crisis is not singular, but part and parcel of the long-term coevolution of finance and housing markets. While readers might not agree with all of the conclusions drawn by the authors, the volume of content, which is presented quite accessibly, allows for the formation of the reader's own conclusions."
George McCarthy, Ph.D., Director, Metropolitan Opportunity, The Ford Foundation, New York, NY

"In this insightful and important book, three of the nation's leading experts on financial innovation explain how future innovations can continue to finance home ownership without taxpayers being so heavily on the hook for mistakes as they have been as a consequence of the crisis.
Robert E. Litan, Vice President for Research and Policy, Kauffman Foundation, and Senior Fellow, Economic Studies, The Brookings Institution

"You can't understand the future of the U.S. housing market without an appreciation of its history, as well as housing markets in other countries. This book provides this valuable context, followed by innovative solutions informed by careful analyses of public policies, business practices, and consumer behavior."
Professor Peter Tufano, Peter Moores Dean, University of Oxford, Saïd Business School