Evening star., 1938-02-26
SAVINGS ANDL0AN
BUSINESS HOLDING
Activity Displays Strong Re.
sistanCe to General Down.
ward Trend.

The activity of savings and loan as
sociations displayed strong resistance
to the general downward trend of busi-
ness during the last half of 1887, ac-
cording to the February issue of the
Federal Home Loan Bank Review.
This disclosure is part Of q compre-
hensive survey for the year covering
major factors affecting home financing
and new residential construction. In
November and December the seasonal
decline in loans for new home building
and for other purposes was about the
same as in the corresponding months
OF 1886, despite the downward trend in
other fields Of business, the Review
points out.
IAN analysis of lending activity by
savings and loan associations over the
1936-l937 period shows the relatively
stable character of the industry" the
publication said
New Construction Grows.
Loans for new construction and
home purchase chiefly accounted for
the rapid growth in the rate Of lending
by the associations in 1886 and 1887.
Whereas. in January, 1886. forty-six
cents out Of every dollar lent by these
organizations was to finance new con-
struction or the purchase of existing
houses; by September, 1887, about "a
cents out Of every dollar loaned was
used for these purposes.
fnorc frr netr,,pfiNye
increased from a rate of 20 per cent
In January. 1886. to 28 per cent in
August, 1896, maintaining the 1928
per cent level through December, 1897.
At the same time the proportion of
loans for refinancing home mortgages
declined. Even during the last half
Of 1887 there was no pronounced in
crease In the dollar amount of re-
financing loans or their ratio to total
loan volume, increases which normally
accompany q recession In business.
Out of the estimated total Of $764,-
$4,000 in loans made by all savings
and loan associations in the country
during the last year, 81 per cent was
made by member institutions of the
Federal Home Loan Bank system. This
was a gain Of per cent over the 1885
ratio.
One Family Dwellings Increase.
An analysis of the estimated 1885,
900 non-farm residential untils built
during 1887 reveals that more one
family dwellings have been constructed
thop 1{1 ir, rifinS nf
10000 population or over. The trend
toward one-farily homes was signif1-
cant, rising from 81 per cent Of the
total building in 1886 to IS per cent
in 1887. Apartment houses and other
multi-family dwellings made up "a per
cent of the total in 1886 and 20 per
cent last year. Reports from cities
Of $4,000 population and over show
that in 1897 two-family houses con-
stituted only per cent Of total build.
ing instead Of is per cent as In the
period l922-27.
On the subject Of construction costs
the review said:
Measured by building permits is
sued, the average cost Of dwellings
actually built in urban areas was
slightly lower in 1887 than in 1886.
The decline took place during the last
six months Of the year. costs being
above the 1896 average during the
first six months. This decline paral-
lels that of the small-home building
cost index Of the Federal Home Loan
Bank Board, as we'll as the index of
wholesale prices Of building materials
Of the Department of Labor. Both of
these showed marked and steady de-
creases since the summer Of 1887.
However, building material prices were
i've points higher in December, 1887,
than in October. 1886, when a general
rise in wholesale commodity prices
began
Long Range Rental Trends.
More encouraging to building ex-
pectations for 1888 are the long range
trends in rentals and foreclosures.