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Show mm WW II I I 11.11 I ...I... .Ill... RADICAL SLUMP IN HOME BUYING Since the housing industry is generally considered to be the largest employer in the nation, any serious changes in the home building situation can have a dramatic impact on the economy. It is surely time, therefore, to assess what is happening in this field and what may be expected to come next with mortgage money suffering an ever-greater squeeze. Threats of rising foreclosures and bankrupticies have so exercised the home construction industry that the National Association of Home Builders has just called its first emergency session in twenty years, according to one of its spokesmen. A recent nationwide survey shows clearly that steadily increasing numbers of potential home purchasers are being frightened away by the soaring mortgage rates and the increasing in-creasing difficulties of finding banks willing to loan money. At this writing, rates are ranging generally from 14' 2 percent to 16 percent on a national scale as compared com-pared with 10' 4 percent twelve months ago and 13 percent no longer ago than February of this year. Many of those who are anxious to have a home of their, own simply will not attempt a mortgage at today's fearfully exaggerated levels. Then, too, many workers are discovering that their incomes are considered too small to qualify them for loans from many financial institutions. And some lenders are simply standing by rather than committing themselves to long-term loans with ra'es so volatile. RELUCTANCE TO BORROW In some parts of the country the only ones who appear to be borrowing for home purchasers are those who actually ac-tually have to for some specific reason such as a work transfer. A real estate loan officer in the St. Louis area claims that mortgage applications have virtually vir-tually dried up since the rate touched 15 percent. It is shocking to learn from another St. . Louis, real estate source ., that mortgages currently cost 50 percent more than they did a year and a half ago. Many prospective home buyers know this, are aware that they cannot qualify at this time, so they often make no effort to borrow. A loan officer at a Boston financial institution says the average house loan at this time is for $42,000 with a repayment period of 30 years. With interest rates at their present high and taxes the way they are today in average metropolitan centers, the payments on a typical loan are over $800 a month. In most iastances, it would take a family with two incomes to handle such a responsibility, and even then the pressure could be considerable. HOUSE PRICES STILL RISING According to the Federal Home Loan Bank Board, the cost of buying a house is going up almost as spectacularly as interest rates. For example, the average price of a home at this time is estimated at $71,100 compared with SM.900 a year ago, and of particular significance is the revving up in the rise in recent months. The average in January was $09,200, which means that just since then the average price oT a house has climbed $l,900-actually ini just a matter of a few weeks. Iack of demand owing to financial pressures may well slow or even halt this advance in the outlay needed for buying a house, but this will undoubtedly be only temporary. MORTGAGE APPLICATIONS DISCOURAGED Because of the turmoil in the financial end of the real estate market, many banks and loan associations have stopped encouraging mortgage applicationsand ap-plicationsand some have closed their windows entirely. The top mortgage lender in Washington recently posted a mortgage mor-tgage rate of 17 percent, admittedly for the purpose of discouraging borrowers. Realtors in some parts of the nation are reporting an increase in financial assistance from home sellers to facilitate transfer of their property. Such creative financing may become steadily more popular until there is some easing in the conventional mortgage market. Mr. and Mrs. Neal Domgaard have a new granddaughter Ixirn to Mr. and Mrs. Mike (Kathy) McKee in the Uinlah County Hospital March Id. She weighed 5 lbs. 13 oz. and was named Dana Lynn. Other grandparents are Mr. and Mrs. Mark McKee, Maeser, Ut. Great grandparents are Mr. and Mrs. Harvey McKee from Maeser and Mrs. Elsie Jardon of Gusher. |