Evening star., 1951-05-19
81 Home Production
Will Exceed Quota,
Officials Believe
Continued From Page B-1)

mer lenders will again be ac-
lively seeking mortgage loans"
Cites Opinion of Experts.
While not entirely discounting
the present situation, Mr.. Col
ton wrote:
There is as yet no proof thai
the bond market will be permitted
to drop further. In fact. newly.
appointed Federal Reserve Board
Member Martin CWilliam Nc
Chesney Martin. jr) has publicly
stated that an orderly" market
will be maintained, and that !.
over a long period of time capt
talism will do better with as low
interest rates as possible"
There is q strong and growing
group of mortgage experts" MI
Cotton wrote, who maintain that:
"A sharp drop in applications
for loans is at hand and will
largely Offset the drop in avail
able funds;
Savings. while down from the
rate of year ago. are still accum-
ulating in huge amounts;
"Accelerating payments into
pension funds will bolster the in
vestment market:
Both the Congress and ad-
ministrative authorities are still
determined to maintain the CT
Law +n 1f ,No,. narnt.
Available funds for this pur-
pose might readily be expended
as a counter balancing threat to-
any permanent abandonment of
that field by private financing;
."And in general the Importance
OF residential construction in the
economy is such that it can't be
allowed to remain unduly de-
pressed for long"
To Affect Number of Units.
AS for the number of housing
units to be started this year. itI
will. of course. be affected by the
availability of mortgage funds
observers pointed out.
But such has been the terrific
headstart in the first four months
of this year that the number OF
homes put under construction
would have to decline to a.
monthly average of $1,000 for the
remaining eight months of the
year even to hold to the Govern
ment-set limit of 850,000 units.
No Government official involved
In this field reached by The Star
believes that production would
decline to this point. All seemed
to think that the years output
would exceed 850.000 and that it
might reach as much as million
or more.
A recent Federal Reserve Board
officials estimate put production
for the year at between l million
IL million.
The Bureau Of Labor Statistics
reported this week that homes are
being put under construction at a
rate considerably higher than 1
million year.
Comparative Figures Cited.
In the first four months of the
year 346,000 housing units we're
started, in contrast to only 1885,
100 started during the comparable
period in 5l949 when total produc-
ton for. the year amounted toI
1,o25.10o homes.
While April'S output did show
a drop of about Is per cent from
the record volume attained In the
same month of 1850. telegraphic
reports indicated that in some
areas production rose.
Builders who have recently
complained bitterly over the
tighter mortgage money situation
and indicated they believed it
would sharply limit output during
the remainder of the year un-
doubtedly have heard current
rumors of sitter Government
curbs on building.
One new curb is expected next
week, when a square foot limita-
ton on home sizes will be slapped
on the building business to replace
the ban on over-$35,00 houses.
To Be Issued Shortly.
The square-foot plan, indicated
months ago in The Star as a pos
sibility, is scheduled to be issued
next week. It is considered to be
a fairer limitation than the $685.
900 ceiling, since it makes allow
ances for differences in construc-
ton costs in different parts of the
country, and for different types
of construction needed under diff
ferent climatic conditions.
How big house will you be
able to build, under the square,
foot limitation?s
The exact answer will have to
await issuance of the regulation
next week.
However, indications are that
the top limit will be in the neigh
borhood Of $500 square feet. Of
f1cials do not wish to cut down
on production for middle income
families beyond the amount
sought by mortgage credit curbs.
They do believe, however, that
certain luxury" building should
be deferred during the defense
period in order to conserve ma
terials.
What other steps the Govern
ment may have in mind as a
means of further cutting back
housing production in the future
in line with mounting raw ma
terials needs of defense producers
are still under wraps.
1t is no secret. however, that
further steps of this sort probably
ui1l ho foLo,, aex,oa;aT., -.