Measuring the Narrative of “It’s a Wonderful Life” against more Traditional Historical Evidence

It’s a Wonderful Life assumes that the desire to own a home is “deep within” most people because it anchors them in a positive way to the world immediately around them, and thus secured, they become more confident and more caring people toward those who are their neighbors. 

When we look at home ownership data for the United States, we find that nearly two thirds of Americans own their home, and that this figure has been remarkably stable for the last fifty years.  Stepping back and looking at the longer trend line, we find that the number of Americans who owned their homes didn’t go above 50% until the year 1950.  How can we combine traditional historical sources with what we are told in “It’s a Wonderful Life” to understand why this situation changed: Did American capitalism become more democratic over time?

Before the New Deal , the federal government did not provide any assistance to either borrowers or lenders. That earlier economy simply did not have the institutional capacity to support credit arrangements that could stretch far enough into the future to make homeownership available to the vast majority of wage-earning Americans. Indeed, economic historian George Soule found that “while the poor did not grow poorer, the rich grew richer more rapidly than the poor did” (Soule 317).

A page from H. Morton Bodfish and A. D. Theobald, Savings and Loan Principles (New York, 1940)

Thus, even in comparatively prosperous times (and even with the assistance of a building and loan), financing a home remained a daunting challenge. A building and loan association could help the aspiring homeowner in two ways: by offering a higher interest rate on the account in which the nest egg was accumulating; and, secondly, by offering to finance as much as two-thirds of a first mortgage over twelve years. Even under these terms, homeownership still remained generally restricted to those in the upper middle class and above. Indeed, it was the utilization of building and loan associations by these Americans that most accounted for the associations’ exponential growth in the 1920s (Halbert 15, 24–25, 27–30; Mason 57–58).

If the blueprint of capitalism presented by the building and loan industry was elusive yet attainable to white immigrants, there is a fact that is utterly absent from It’s a Wonderful Life: this model of democratic capitalism in the United States was generally reserved for whites only.

Questions for Discussion and Reflection

1) What were the major barriers to owning a home in the early twentieth century and how did building and loans associations help make that process accessible to working families?

2) How, according to George and Peter Bailey, is home ownership a positive moral value? Are they right? Does this mean that renting your home is “wrong”?