Question

Which statement best describes the effect of the great depression on housing?

1) Because of greater employment opportunities, many Americans were able to buy new houses.
2) Because of greater employment opportunities, many Americans were unable to buy new houses.
3) Because of the economic downturn, housing prices decreased significantly.
4) Because of the economic downturn, housing prices increased significantly.

Answer 1

3. The Great Depression led to a significant decrease in housing prices due to high unemployment and widespread foreclosures, resulting in makeshift shantytowns as people were unable to afford new homes.

Step-by-step explanation:

3. The effect of the Great Depression on housing is best described by stating that because of the economic downturn, housing prices decreased significantly. During this time, many Americans lost their jobs and faced unemployment, with the Bureau of Labor Statistics reporting that approximately one-quarter of the American workforce was jobless by 1933.

This widespread joblessness led to high rates of foreclosure and homelessness, making it exceedingly difficult for people to afford new homes. As a result, housing prices dropped due to reduced demand, and makeshift shantytowns called 'Hoovervilles' emerged as individuals and families sought shelter anywhere they could find it.