Vcrcqncy Sqle qnd Rentcrl Survey Upsets 'Knockers'

Secretary of Commerce Sinclair Weeks said July 13 that preliminary results of a Commerce Department survey shorn' that vacant housing for sale and for rent during the second quarter of 1955 amounted to 2.2/o of all dwelling units in the United States. The current vacancy rate, compiled in a sample survey conducted by the Department's Business and Defense Services Administration and the Bureau of the Census, compares with a rate of 1.6/c f.or 1950, when housing shortages were prevalent in many areas and buyers and renters rvere restricted in their selection.

Secretary Weeks pointed out that, according to the survey, the demand for housing continues strong and is absorbing the near-record number of dwelling units being built this year. The current vacancy rate is also low enough to dispel recent apprehensions about overbuilding at this time, the Secretary said.

Under these circumstances, the survey seems to indi.cate that a major construction problem is not overbuilding, but ratl-rer building enough of the right kinds of housing in the right places. The "elbow-room" needed by the 2O/o of our population that moves each year is being provided more by rental housing than by sale housing, according to the survey. Since 1950 the ratio of housing for rent to total housing increased from l.I/o to I.8/o, while the ratio of housing that is for sale, 0.4/o, remains about the same as five years ago,

NAHB President "Answers" Critics

Earl W. Smith, president of the National Association of Home Builders, said the new Census Bureau survey released by Secretary of Commerce Weeks, showing a nationwide available vacancy rate of only 2.2/o, "fully sustains the position of the home building industry that no overbuilding problem exists in this country."

"The critics of the home building industry who have raised the cry of overbuilding will find neither comfort nor support in this survey by an institution of the high caliber of the Census Bureau," Smith said.

"There is neither overbuilding nor any prospect of it. As a matter of fact, considering the actual need for new housing, there is underbuilding. And in the light of our rapidly growing population, underbuilding is going to be the real problem in the years immediately ahead."

The home building industry, Smith said, expects to start approximately 1.3 million units in 1955. This compares with 1.2 million in 1954. The peak year was i950 with 1.4 million. "Builders are not building houses just to be building," Smith said.

The El Cerrito, Calif., builder has made an extended tour of the U. S. to study local housing conditions and talk with builders about the outlook for the industry. As president of NAHB, he heads an association with a membership of 33,000 which is responsible for approximately 80/o of the annual home building output.

Smith welcomed the trend towards home ownership reflected in the survey. Noting that most of the available vacancies were in rental .units, l-re said, "The American peo- ple are continuir:g to exhibit olvn-a trend which has more ship in the last 15 years." a desire for homes of their than cloubled home o\\.ner-

At the end of the first half, new housing in the U.S. was going up at the rate of 1,320,000 units a year in 1955. In the Los Angeles area (Los Angeles and Or- ' ange counties combined), the first six months brought 61,377 new family dwelling units, reports the Research department of the.Security-First National Bank. If the trend continues the same, the two counties together will again account for close to ONE OUT OF EVERY TEN new homes built IN THE NATION during 1955.

Smirh Predicts Housing to Reach

2,OOO,OOO Units Yeorly in 60's

NAHB President Earl W. Smith told 5CI builders at the Ambassador hotel, Los Angeles, on July 22 that indicated national housing needs will reach an average of 2,000,000 homes a year in the 1960s. The industry members met for a mortgage clinic sponsored by the four associations of Region 15 of the National Association of Home Builders. Smith said building would continue good this year and possibly next year. He said there is a growing rush to the ar€as just outside cities and an increasingly large percentage now enjoys home ownership.

FHA, VA Tighfen Moilgoge Terms

Washington, D.C.-On Saturday, July 30, after weeks of persistent denials that any tightening up on terms of federally backed mortgages was contemplated, both the FHA and VA tightened terms on homes built with the FHA mortgages or ones guaranteed by the VA. The terms had been a big prop under the huge homebuilding this year, accounting for about 50/. of the housing starts in the first half. In a joint statement, both Housing Commissioner Albert M. Cole and FHA Commissioner Norman P. Mason said they would require higher down payments and shorter maximum repayment periods.

The FHA will now require a cash payment of. 7o/s of the first $9000, plus 27o/o of the value over that (formerly 5/o plus 25%); the VA, which formerly required no down payment, will now require one of. 2o/o.

Both agencies cut the maximum term for repaying a mortgage loan from 30 to 25 years.

In a bitter statement following the action, NAHB President Earl W. Smith said the government action was "untimely, unwise, totally uncalled for . . . it would blast the aspirations of thousands of moderate-income families seeking and needing nerv homes." The National Association of Real Estate Boards agreed.

The FHA and VA statements called the action "antiinflationary" and a "mild and temporary precautionary measure," and also noted indications of "possible shortages of some building materials (cement, some steel items and n'allboard)."