Evening star., 1940-01-20
Home Interest
Rate Lowest
In History
4H% Most Common
First Mortgage Figure.
Survey DiscIoses
By JAMES Y. NEWTON.

SANxC0 NE w xO[Ns
The person who buys q home to-
day has access to the lowest mort
gage interest rate in the history of
the country, the National Associa-
ton Of Real Estate Boards re-
ported today, following completion
Of a Nationwide survey on home
financing practices.
A ~ per cent interest rate has
become the most common rate for
f1rst mortgages on new moderately
priced homes in 10 per cent of the
Nations cities. There has been q
gradual scaling down of rates
throughout the country. Material
for the survey came from confiden-
tial reports submitted to the ma
tional association from member
boards in 261 cities.
Chief credit for causing mortgage
rates to be lowered was given by the
report to the Federal Housing Ad-
ADMINISTRATION. Pointing out that
money is cheaper than ever before,
the association says that in every
previous year data have been COL
lected the dominant rate has been
8 per cent. This has now given way
to S per cent rate.
No "War Effects"
The surveys findings on changes
In cost Of mortgage money and real
estate capital supply are of general
interest both as measure of how
far the recent change in F. H. A.
rates has actually affected interest
levels and as showing no measur-
able war effects" in this field.
With interest rates on real estate
mortgages still falling in Al per cent
Of cities reporting, remaining static
In Sc per cent of them and rising
In only 3 per cent, the supply of
mortgage money is the most gen.
orally plentiful of any period in the
II years covered by association sur
veys. Capital is seeking loans in 81
per cent of the cities, while loans
are seeking capital in only 8 per cent.
Supply and demand are equalized in
II per cent of the communities.
In 81 per cent of the reporting
cities a 5 per cent interest rate is
now the commonest rate on new,
moderately priced homes, while in
only 81 per cent of the cities is per
cent interest any longer the COM
monest rate. In 16 per cent of the
cities a 512 per cent rate is the one
most frequently found A year ago
only SO per cent of cities said the
5 per cent rate was commonest, and
43 per cent still held to the 6 per
cent rate as commonest.
Rates More Nearly Uniform.
Change IN the interest-rate struc-
ture Of the country in the last five
years is shown by the fact that,
whereas the 5 per cent rate is now
dominant for home mortgages, q
Ike survey Of five years ago found
only 2 per cent of the cities having
5 per cent as q common rate. Stimuli
taneously, home mortgage interest
rates have become more nearly uni
form over the country than they
have ever before been. Today in 81
per cent of the cities no rate higher
than per cent is prevalent. Five
years ago this was true in only Sc
per cent of our cities.
Only 10 per cent of the cities show
the ~ per cent rate and report no
higher rate range as also common,
but SIS per cent of cities show no
rate higher than 5 per cent as COM
mon.
1t is remarkable that rate higher
than per cent is seldom reported
any longer as the prevailing rate on
new small homes, although 81 per
cent Of the cities still have no money
commonly available at lower than
8 per cent.
The subdivision market is more
active than year ago in So per cent
OF the cities of the country, the sur
vey shows. It fell off in only 6 per
cent Of the cities. There were 16
home sites purchased per 1000 fam
lilies IN the reporting cities in the
flrst II months of the last year. This
means individual lot purchases of
vacant property, presumably for fu-
ture home building.