Laurel outlook., 1948-04-14
Officials Warn
Builders to Cut
Prices of Homes
Leading Builders Say
Little Can Be Done
By Them

CHICAGO. - Federal government
representatives and bankers in ar
address to more than $500 of the
nations home builders warned them
to start planning ways of lowering
home costs.
The attacks on high costs met
with sharp replies from leading
builders who argued, in effect, that
there was little they could do about
prices.
The debate high lighted several
panel discussions before a full ses-
sion of the National Association OF
Home Builders annual convention.
The arguments brought out these
major points from the varied inter-
ests represented:
Mortgage money for homes is
drying up, with thousands of CT
loans going begging"
Lending institutions are finding
profitable investments elsewhere,
which may mean an tipping in in
terest rates on mortgage loans in
order to attract them back.
Builders have little to do with
prices, (which are based on costs
and anyway, homes cost no more
in proportion than do other things
that people need and want"
Expect Good Year
Despite the fears concerning fl
%nancing and inability of many to
buy homes at present prices, the
1913 building year should be just
as good as 1947, when more than
$50 thousand units were completed.
The debate on prices was begun
by T. B. King, Washington, D. c.,
director of the veterans admins
tration loan guaranty service, who
told the builders bluntly:
"The proportion of new homes be-
ing sold to nonveterans would APP
pear to be disturbingly high. The
bulk of new housing is in a price
class beyond the reach of most vet
eran families. 1t is not difficult to
see that the bottom of the barrel is
being approached unless housing
costs can be reduced.
"This means you must give more
for less. l venture to say that
the challenge will be met by you
your competitors"
King said later that by "competi-
tors" he meant more progressive
builders, prefabricators, or "things
like that, not public housing"
Banker Speaks
Rollin Benge, a Detroit banker
representing the American Bank
ers' association, told the convention
that the problem was one of self
analysis by the builders.
"The reported demand for 10 mil
lion homes can only be met" he
"by better homes at lower
price levels. Low cost housing has
become high cost housing today.
Costs must be held down to the
ability of potential purchasers to
Joseph Meyerhoff, Baltimore,
Nd, past NAHB president, was
by the delegates when he
laid that the builders we're getting
ired of that kind of talk because
we are fighting every day to keep
,osts down. and builders certainly
be expected to produce homes
or a selling price less than what
t costs to build them"
The warning about higher inter-
st (Which would be reflected in
ligher home COSTS was voiced by
ohm c. Thompson, New York, pres
dent of the Mortgage Bankers as
ociation.
The 4 per cent rate was all right
1hen it was higher than the return
n corporate bonds" he said. but
mortgage loans have an overhead
ost, too. The net return on a 4
er cent loan is actually about 3.2
er cent ove a five year period.
he money is there, seeking a fair
but there is a hesitancy at
ne present level of return on con-
truction and home mortgage