Evening star., 1936-01-11

thing, but to expect that need to he
translated into actual houses for the
of American citizens needing
'Isllsu I9ulouB sBM ssuuou 5lBnb9pB
To-day a review of the statistical
background affecting the need for
homes for the masses of the American
public amply confirms this figure.
American Builder does not predict
that any such volume will be built in
1886, or for several years thereafter,
but it does reaffirm that the tre-
mendous piled-up volume of housing
deficiency clearly shown by an analysis
OF housing facts is beginning to break
through, and that in 1886 start will
be made-a healthy start-toward
supplying the crying need for homes.
The most recent study OF the need
for homes in the United States is that
made public by the Committee for
Economic Recovery, non-political
group of business men who declare the
only way the present standing army
of unemployed in this country can be
put to work is through a revival of
home building. This committee, on
the basis of analysis of basic housing
factors, declares that from 100000 to
100000 homes per year will be re-
quired for the next 10 years.
25O,O00 Homes for 1886.
These figures further substantiate
the recent estimates of Peter Grimm,
Assistant Secretary of the Treasury,
in an interview published in the No
vember American Builder, pointing
out a need for from 100000 to TO-
100000 new homes in the next 10
years. The committees estimate for
1886 is 250,00O homes, which is more
conservative than the 1886 estimate OF
Mr.. Grimm, who perhaps did not take
into account the slowness with which
the widely diversified elements of the
residential building industry move,
despite the pressing need for a build
ing revival.
ITO most building men the sharp
increase in home building in the Fall
of 1885 is ample proof that 1885 will
move at an accelerated pace, with but
one possible deterrent-credit. They
know that there is need for modern
homes at moderate cost, but can these
homes be financed? Let us consider
this point fully:
There is in the United States today
the greatest credit background for
home building in its history. The 2l.1
billions of savings bank deposits, the
2O.9 billions of life insurance company
assets and the billions of building
and loan association assets form a
credit reservoir for home building
greater than exists in any other ma
ton or has ever existed in this Nation.
1t may be truly said that if ample
credit can make a building boom we
will have a boom.
New Era of Financing.
"The year 1885 will be historic to
building men as the year in which the
long-term amortized mortgage was
successfully put into operation and
completely displaced the old form OF
costly first and second mortgage
The year 1885 will also be
for other measures taken
to liquefy and amplify residential
mortgage credit. Under the banking
act of 1885 amortized loans were given
a liquidity comparable to any sound
asset. Under the provisions of the
national housing act and the Home
Loan Bank system, credit channels
were opened up that make available
funds in great quantities for home
building. The absorption of some
$3,000,0 100000 of distressed mortgage
loans by the Home Owners Loan
Corp. in effect placed that much ad-
ditional funds into the mortgage mar
ket. All of these factors lay the
foundation for an unprecedented
credit expansion for home building.
1t is true that only small start was
made in 1885, but in an industry as
gigantic and ramified as home build
ing and its financing institutions,
slowness is unavoidable.
THE fact remains that start was
made and that by the end of the year
many banks, insurance companies and
building and loan associations were
actively competing for sound mort
gage loans and were stating their will
ingness to take all they could get. How
leading life insurance companies in
creased their loans is shown in an ac-
companying chart. 1t is to be expected
that this competitive situation will in
crease in 1896 and greatly enhance
the flow of funds into the mortgage
field. A gradual lowering of interest
rates Is predicted in some quarters as