Flome Building Industry Predicts Biqqest Building Boom Still Ahead

By R. G. "Dick" Hvghes, presidenf Nofionof Assn. oJ Home Builders

ilies may now obtain long-term FHA-insured mortgages on terms comparable to those available for veterans-only 5/o down with a maximum mortgage insurance of $17,100.

$6 Billion Market in Remodeling

The home building industry is rounding out the second biggest year in its history and is getting set to mark up some new production records in 1955.

Present estimates indicate that the industry will have provided new housing for about 1,200,000 families of all income brackets during 1954, and the outlook is for construction of perhaps as many as 1,400,000 housing units in 1955, barring a major reversal of today's economic conditions. Such a construction pace would add some $14 billion to the real wealth of the nation and would make 1955 the biggest home building year on record.

Any forecast of home building activity, of course, depends to a great extent on the poli.cies of the federal government. But it is no secret that the government's present plans call for continuation of the same fiscal and credit policies that are now in effect, subject to such modifications as may become necessary in the months ahead. Those plans also envisage the full use of all the liberal provisions of the National Housing Act of 1954 to assure the country a continued high rate of home building.

Trail-Blazing Provisions in Act

The 1954 act contains many bold, trail-blazing provisions. It should enable government and industry to combine their efforts and to create completely new concepts in housingto open up vast new housing markets tha.t will give every American family the opportunity to live in a good, solid, livable and satisfactory home in a decent environment.

The low down-payments and long-term mortgages permitted under FHA sections of the act can make good housing available to a great many families never before reached by the home building industry. Hundreds of thousands of non-veterans rvill be able to buy new homes on terms they can afford. Prior to enactment of this legislation, their required down payments would buy only half the house they needed and wanted, and are now in a position to buy.

Servicemen on active duty make up another market that has been expanded by the new housing law. Service fam-

In addition to the new housing market, there is a great and large untapped demand for rehabilitation and maintenance of our existing housing inventory, which could run anywhere from $6 billion annually on a conservative estimate. For the first time in history, FHA insurance is now available for mortgages on dwellings that in the past have been treated as uninsurable slums or blighted parts of the community. Financing aids for such mortgages hereafter lvill be available through special assistance functions of the Federal National Mortgage Association. There are obstacles that must be overcome, but these programs promise bright future for the renewal and rehabilitation of dying areas of our cities.

There are tools in the new housing law, too, that will enable the home building industry to do a real job in modernizing and bringing back into new condition the vast number of existing homes which, while not slums, are in need of major oVerhauling. For example, both the FHA and VA are now able to put into effect open-end mortgages under which \ome owners as well as new home buyers may obtain long-term financing for the improvements, modernization or repairs needed to maintain their homes in the best possible condition.

Federal Aids for Minority Housing

One of the major problems (and opportunities) facing the home building industry in 1955 is the provision of good housing for minorities. Naturally, this problem is more acute in some areas than in others. But it is generally a fact throughout the country that builders long have been ready to build the new housing needed by minorities. They have been unable, however, to obtain the financing needed to accomplish this objective.

We now have two major federal aids which I believe can help solve this problem. In the first place, the voluntary credit committee created by the new law can channel private funds into areas for minority housing. In the second place, the special assistance functions of FNMA can be used to buy mortgages on minoritv housing. Once this financing roadblock is surmounted, the big remaining problem will be acquisition of building sites. This problem can and will be solved. And its solution will open up a vast untapped market for new homes-a market which has been too long neglected and for which all of private industry has a social responsibility.

Another serious problem confronting the housing industry is that of obtaining adequate community facilities. If we are to provide the huge number of homes that will be

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