Evening star., 1952-01-26
Labor Output
Expected 10 Be
Major Factor
Materials Outlook
Believed Good
Except on Metals
" NVUSU Vs 6SWU
Sior StoH c Correspondent

CHICAGO. Jan. 26.-The single
most pleasant thing that home
builders believe 1852 has to offer
for their industry is decline in
construction costs.
That was evident here today as
builders left for their homes after
q flve-day annual convention at
which Federal officials and indus
try representatives sketched in the
general outlines of the home
building picture for the crucial de-
fense-production year ahead.
You won't find builders shouting
from the rooftops that costs areI
going to drop this year. In the first
place, they don't know absolutely
that this will happen. IT the sec
ond place, they are not eager tol
have customers begin to put of
buying until cost reductions are
reflected in hVne prices.
After all, prices may not drop.
But thoughtful builders do find
conditions ripe in the months
ahead for a reversal of the trend
which has sent prices zoomfng |
since the Korean war started.
Now They Think.
Here are items in the logic be-
hind their reasoning:
l. The industry is convinced the
Government really means business
when it says it will not permit
more than 100000 houses to bel
started this year.
2. In spite of some grumblingI
over this S00,000-unit ceiling,
most builders are beginning tol
doubt whether even such a maxi |
mum can be reached owing to thel
very real deterrent that Regula-
ton x down payment require
ments have become.
3. Thus. home building mayI
be down this year by 80 per cent
or more from last year, and
almost so per cent from the year
before.
4. Such a decline should mean
that both labor and materials
manufacturers and suppliers will
have entered a buyers market
rather than a sellers market.
S. In a buyers market-a buy
ers' market, that is. for home
builders but not necessarily for
home buyers the builder can be
expected to be the recipient of a
very kind blessing amounting to
a desire to please him and to
keep his good favor.
6. Under these new conditions,
builders for the first time in years
should be able to bargain with
suppliers over prices of materials
instead of pleading to be supplied
at almost any price, as has often
been the case in the past.
Less Competition for Labor.
z. At the same time, since there
can be expected to be certain
amount of unemployment in the
building trades, builders should
not have to worry about paying
premium rates for labor or about
competing with each other for
scarce building mechanics.
8. In, fact, if there is certain
amount of unemployment. home
builders believe workers will pro-
duce more per man than if the
industry were operating on al
full employment scale.
"If a man produces more. It'll
reduces costs even If material
prices are the same and the rate
of pay is the same" one builder
pointed out. when there aren't
enough men to go around, it's only
human nature for them to drag
their feet a little"
The prospect of somewhat low
cred costs is not enough however,
to make builders dance jig and
clap their hands with joy. There
are always a few flies in the oint-
ment. a few elements Of uncer-I
tainty, and the year ahead is no
exception.
In the first place, how many
families are going to be able to
buy homes under the present rela-
lively high down payment require
ments?
Will Money Be Available?
Second, will Congress allow the
Federal Reserve Board and the
housing and finance agency to
-aise down payments on homes
costing less than $4,000?
Third, will the relative scarcity