The Chronicle-star combined with the Moss Point advertiser., 1949-02-04
What 1t Means :. ~ A> i"
In Housing Over, But Low Cost
Will Continue To Be Scarce
BY CLARKE BEACH

The end of the housing boom
after the first World War came
in 1925 = 4 years before the
whole economy began to dis
integrate. But leading econom-
lists here see no such dire por-
tent in this drop in housing
production.
The main reason, as they in
terpret it, is that the builders
have been putting up houses for
the carriage trade. And now the
bloom is off that market. Most
of the people who were badly in
need of houses after the war
and could afford to pay high
prices for them are taken care
of. The peak of that demand
passed in late 1916 and early
1947.
The people who still want
to invest in the new, relatively
high priced homes, moreover,
aren't finding it SO easy to fl
nance them as they did a year
or two ago. Interest rates have
gone up a bit. Some sellers are
requiring larger down pay
ments. And veterans, who used
to do a large part of the buy
ing, are finding it harder to
get loans. Lenders do not con-
slider the governments financ-
ing arrangements for veterans
as attractive as they once did.
an general" said one prom
inent economist in the housing
field, people r losing faith
in the housing market at the
present prices"
The Housing Act of 1948
doesn't yet seem to have had
much effect on the home con
struction industry. That act
contained most of the financing
features of the rejected Taft
Ellender- Wagner housing bill.
1t was intended to make it cas-
Ter to finance the building and
buying of homes costing about
$11 900 or less.
The sponsor of the act, Rep.
Wolcott (R-Mich), predicted
that as a result of it 100000
new non-farm dwelling units
would be started in 1948.
AS now estimated by the La
Dor Department, however, the
housing starts totaled only $685.
600. The monthly total of new
houses started began to drop
in June. and it went down
steadily from then on. The
drop wasn't seasonal. The VIM
ter building lull ordinarily
doesn't come until October or
November.
The experts in the Commerce
and Labor Departments pre-
dict that only $4,000 housing
starts will be made in 1949.
Even if the Taft Ellender War
ner Bill is passed, which po-
litical observers think is GER
tain, it will mean no more than
an extra 10000 to $4,000 addi-
tional housing starts during the
year.
1t will thus be probably well
oyer a year. before the all-time
record for home building is
equalled - 937 1000 dwelling
units in 1925. (These were built
when the U. S. population was
only 115, 1871 1868. Now it is about
147, 28O, O00.)
The decline has not hit the
construction industry as a
whole. Both the volume and
dollar value of overall con-
struction has been steadily ris-
ing. Commerce and Labor ex-
pect about the same amount of
construction in 1949 as in 1948,
although predicting hat the
cost of building will be S per
cent higher.
Industrial contraction is ex-
pected to decline in 1949. But
offsetting both that and the fall
in home construction are antici-
pated rises in the amount of
construction work to be done
in commercial, institutional,
public utility and governmental
construction work. Most of the
latter is expected to be schools
and hospitals built for the Vet
Grams Administration and the
Public Health Service.
The volume of home con-
struetion is not actually low.
In 1916 only 413.000 housing
units were produced. The av-
erage in the 1905 was only
273,000 a year. In 1947 it
jumped to 914,000 units.
The low period i'll the thir-
ties built up a large housing
deficit. This was made worse
after the war when the mar
riage rush, followed by rising
birth rates, created many new
families. all wanting homes of
their own.
But most of the people who
now are in need of homes are
in the low and low-middle in
come group. The experts esti-
mate that 5000, 900 such fami-
lies need new dwelling places.
The best hope for boosting
home construction, they say.
lies in building to meet the de-