Another Grecrt Yeqr for Homebuilding Predicted

By John M. Di,ckerman, Erecutiae Director National Association of Home Builders

The optimistic outlook for business in 1956 will be reflected in a steady, although highly competitive, market for the hcime building industry.

The industry's present position is quite different from that of a year ago, when it acted as a pace-setter for the entire economy. At that time the home building industry was a beneficiary of an exceedingly heavy flow of mortgage money. Today, mortgage money is tight, a condition that has existed in varying degree since last spring.

The difficulty in obtaining adequate mortgage money has been aggravated by the expanding credit demands frbm all sectors of the economy, and by the efiorts of those responsible for monetary policy to cope with this problem of demand outdistancing supply through such general controls as the Federal Reserve rediscount rate.

W'e are now experiencing something of a slide-off in housing starts which, although still at high levels, are below the exceptionally high levels of late 1954 and early 1955. It is the adjustments which have been taking place in the free money market, and not the mid-year credit restrictions on home building imposed by FHA and VA, which are responsible for the decline in housing starts at the present time. This decline probably will range from 150,000 to 200,000 units under the high 1954 fourth quarter seasonally adjusted rate of about 1.4 million.

But for all its problems-mortgage money difficulties, credit restrictiqns, rising building costs, to name but three-the home building industry, by and large, is in excellent shape for challenge and growth. The sustained high volume of 1955 which resulted in the start of an estimated 1.3 million units, predominantly single_ family, was the best business year the industry has ever experienced. The dollar volume should be about $t+.0 bittion, up substantially from the 912.1 billion in 1954.

I believe this year will also be a good year in housing. It will be a year of continued strength and high activity, although volume will be down somewhat from last year, perhaps 50,000, perhaps 100,000 units. This year should see as many houses built as the money supply permits, and mortgage money availability and terms will be the major limiting factors. Dollar volume of new construction- despite the moderate fall-off in number of dwelling unitsshould be close to the 1955 level, primarily because of the trend toward larger and better houses, as well as the high costs we ,are encountering for the items that go into the finished home, including land, labor and materials.

Decade of Great Change

The year 1955 marked the tenth full year of home production since World War II. This decade has witnessed great forward progress on the part of the home building industry and a tremendou,s improvement in American housing. In retrospect, these have been years of great economic and social .change, the full significance of which we are just beginning to appreciate.

In this period, we have reversed long-standing housing trends, and have become predominantly a nation of home-

See tt6O Billions in '56 Building

Washington, D.C.-The construction industries should see their first $60 billion building year in 1956, the Associated General Contractors of America declared in its yearly outlook. The AGC, representing about 65(X) cqntracting firms, said total new construction plus repair and maintenance topped 957 billion in 1955, setting a new record far passing expectations. The '56 outlook is for $44,500,000,000 in n€w building (a higher estimate than the Department of Commerce) and $15,500,000,000 in repair agrd upkeep. The AGC's 1955 estimate proved more accurate than many government and other estimates.

The $57 billion 1955 total accounted for more than l5o/o of. all U. S. outlays for goods and services and provided more than one job out of every seven, counting persons employed i,n the hauling, selling and making of building malterials and products. Residential construction totaled $16,300,000,0O0, a 2Lo/o increase over 1954. The AGC forecast that residential construction would dip to about $16 billion this year because of tight money and current government curbs on mortgage credit.

owners; we have seen the development of a mass production industry-which has produced more than ten million houses in 1O years-a volume far beyond our vision at the end gf World War II when this production got underway. We have seen a tremendous upgrading of housing conditions of our people, and we have begun.Jo understand what residential construction can mean to our economic growth, as well as to our stability and strength as a nation.

On the basis of all the information at hand, it is reasonable to expect home building in the next five years to range between 1.2 and. 1.3 million units annuallya somewhat higher volume than the 1.15 million average annuaf rate during 1951-55. In dollar terms, this should approximate $15 billion per year.

In the period beyond 1960, we can expect market growth based on increasing family formation resulting from. the post-war baby boom, so that by 1965 the market should have moved gradually up to 1.5-1.7 million new units yearly, with a dollar value ranging upward to $20 billion.

Throughout the decade we should see a continuation of the trend toward single family homes, rather than apartments, with home ownership rising to close to 65/o, compared with 4l/o in I94I, 56% in 1955. These homes will be larger, with more three and four-bedroom units, reflecting needs of larger families. They will tend more toward contemporary styling, toward use of more component parts, such as the packaged kitchen, toward use of more fully processed materials, particularly plastics and metals.

The years ahead will not be easy. But neither were those of the past decade. There will be manifold problems but. by and large, they should be the hrppy problems of growth and expansion, the problems of opportunity and challenge. Far from being satisfied, the home building market is just beginning to unfold.

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To take some simple little words, And make them laugh and sing, To catch the melody of birds, And make the echoes ring; To bring a smile where smiles were few, To lighten someone's task, This would, I fear, seem vain to you, A foolish thing to ask. But I would seek no finer fame, Could ask no greater prize, Than smile and sunshine to reclaim, fn sorrow-brooding eyes. It needs but gentleness and truth, It needs scant skill or art, To brush aside the wreck and ruth, And reach a saddened heart. Let him who will choose ba,ttles crash, The laurels won by might, And pror,rdly.rna.rch mid war and clash, The victor in the fight; For me 'twere triumph greater far, Than cross bestowed by king, To go where gloom and sorrows are, With words that laugh and sing. * * *-* T' card'

There is a small cafe on the outskirts of Los Angeles, with a big sign on the front that reads: "ALL YOU CAN EAT F'OR A HUNDRED DOLLARS."***

For a time during the terrible flu epidemic of 1918, in the city of San Francisco all public places were closed, all people who worked with or waited on the public wore white flu masks to cover nose and mouth, and many people on the streets wore the same. It wds then that ar drunk uttered a much-quoted remark when he said, "I've lived to see four great things happen: World War One ended, the ch,urches are all closed, the saloons are all open, and the women are muzzled." ,r i< ,r

A few days after New Year's, according to report, the janitor of a small church was seen taking down a banner that had been there during the holidays, that read, "Peace on earth, good will to men." *O"*.r for the season?

Most folks have an idea that "you-all" started in the Southern part of the United States. Wrong. That is, unless Tarsus was a Southern city. For we fi,nd St. Pa,ul, formerly Saul of Tarsus, using that combination of words frequently. In his Epistle to the Philippians, Chapter I, Verse 4, he says: "Always in every prayer of mine for you all." Then in Verse 7, same Chapter, he writes: "Even as it is meet

BY JACK DIONNE

for me to think this of you all." And in the very next Verse, he says: "For God is my record how greatly I long after You a,ll."

One of the outstanding bankers of the United States was making a speech recently, and he came off with this one: "Old bankers never die; they just lose interest." **

. T.om Dreier quotes a friend. of his as saying: "Some people aren't normal unless they are fuming and cussing about something. Not me. I flatter myself that when some woman driving a1 big car gives me less than half the road in passing, I don't call down imprecations on all women drivers for the rest of the day. ONLY FOR THE NEXT FEw MTLES"'

A grammar school exam used the question: "What are the three most common causes of fire?" And a bov answered: "Men, women, and children."

And Matt Weinstock writes in The Los Angeles MirrorNews: "ff you like your present connections, Don't pass cars at intersections."

People everSrwhere do not hurry and worry apd hustle like we Americans. Some visitors in Mexico City started for a bull fight and got lost. They stopped a traffic cop and asked directions. First he told them. Then he drew them a map. Then he got into their car and went with them to the place, saw the fight, and went to dinner with them afterwards. ***

They are a good dearl that way in some respects in the C"j,rt French country in Louisiana. The mayor of one of those lazy, small towns in Bayou country told a visitor: "We sip life; we don't gulp it." *

Isn't it a shame that more of our Americans have not. learned that lesson; to sip life, instead of tryiing to swallow it whole? You see, those country folks have to ta,ke time to do their cooking, and cooking done in a hurry could never be like the "cuisine" of Southern Louisiana. There is an old legend in that courrtry that Thomas Jefferson did not really pay thirteen million dollars for the Louisiana Territory. He paid that much for the French recipes, and they threw in the a"rrtao;".* *

Not true, of course, but if it were it would, in my judgment, make Tom Jefferson the most successful of all purchasing agents, in addition to his other incredible abilities. When you think of the se,nseless fashion in which we strew

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