Typical new-home transaction.-The median amount for new single-family home mortgages insured under Section 203 in 1953 was $8,555, or 3 percent more than in 1952. Despite the removal in April 1953 of credit control limitations on the maximum mortgage term, the average duration for the year 1953-22.2 years was only slightly higher than the 21.7-year average reported for 1952. More sensitive to the influence of credit controls was the ratio of loan to value, as indicated by the rise in the median ratio from 83.7 to 86.5 percent from 1952 to 1953.

The typical mortgage payment, including taxes and hazard and FHA insurance premiums, was $65.95, an increase of 3 percent over 1952, resulting principally from the higher mortgage amount.

The property securing the mortgage had an FHA-estimated valuation of $10,140, including land with a market price of $1,291. The single-family house on this property contained 924 square feet and provided 5.3 rooms, including 3 bedrooms. In all probability, some type of garage facility was also provided. Since there was virtually no change in the size of the house (either in rooms or area) as compared with 1952, the 1-percent rise in median property value may have been largely due to the 5-percent increase in land price reflecting a limited supply of land suitable for residential development.

The annual effective income (before taxes) of the typical new-home buyer under Section 203 in 1953 was $4,880, about 1 percent more than in 1952. Of that income, 15.2 percent was required for total monthly payment, about the same proportion as in the two preceding years but a somewhat smaller proportion than was required in the typical prewar transaction. The property value was the equivalent of about two years of the mortgagor's income, about the same relationship that typified transactions insured in 1952.

Typical existing-home transaction.-Generally speaking, existinghome buyers under the Section 203 program in 1953, as compared with new-home buyers, earned larger incomes, bought higher-priced, roomier homes, and undertook mortgage obligations that were larger both in total principal amount and in total monthly payment (although the portion of income required for payment and the valueincome ratio were lower).

Under credit controls imposed by FHA, at the direction of the HHFA Administrator, in keeping with Regulation X of the Federal Reserve Board, the maximum term during 1952 for mortgages approved before start of construction was 25 years for 1- and 2-family properties with acquisition costs per family unit of $12,000 or less, and 3- and 4-family properties; for all other home mortgages, 20 years. The Section 203 statutory maximum, restored in April 1953, is 25 years for mortgages approved before start of construction, or 30 years if such mortgages do not exceed $6,650 on 2-bedroom houses, $7,000 on 3-bedroom houses, and $8,550 on 4-bedroom houses (or such higher amounts, up to an additional $950, as may be authorized by the FHA Commissioner in areas where costs so require). For all other types of mortgages, the maximum is 20 years.

The median existing-home mortgage amounted to $8,623, or roughly $600 more than in 1952. The average mortgage duration (19.9 years) and the typical loan-value ratio (78.3 percent) were only slightly higher than in that year. Repayment of the mortgage was at a monthly rate of $70.84 (including additional charges for real estate taxes and hazard and FHA insurance premiums), which was over $5 above the median existing-home payment for 1952.

The typical property value for existing homes ($11,061) not only exceeded the 1952 figure by 72 percent but was $900 above the newhome median—the largest plus differential in FHA's history. The land included in the existing-home property had an average market price of $1,461, nearly 13 percent more than in 1952, and apparently contributed substantially to the higher property value. The housea single-family structure-had 5.6 rooms and a calculated area of 1,008 square feet, no appreciable change from the 5.5 rooms and 992 square feet of the year before. The proportion of existing properties with garages, however, was up to 74.1 percent from 70.7 percent, although the gain was not as large as that recorded for new homes.

The annual effective income of the typical 1953 existing-home buyer was up 9 percent to $5,396-$500 more than the median income of new-home buyers. Total monthly payment in existing-home transactions in 1953 averaged 14.7 percent of income compared with 14.5 percent in 1952, while the average ratio of property value to income was down slightly from 1.95 to 1.92 percent.

Amount of mortgage.-New-home mortgages insured under Section 203 in 1953 were principally for amounts of $6,000 to $9,999, less than 11⁄2 percent involving amounts of less than $6,000 and only 14 percent amounts of $10,000 or more. Mortgages on existing properties were more widely distributed, with significant proportions occurring at all levels in the $6,000 to $12,999 range (Chart 14 and Table 19). These data serve to emphasize the relatively more favorable financing available with FHA insurance for new-construction transactions involving mortgages of less than $10,000.

The typical new-home mortgage insured in 1953 had a principal amount of $8,555, compared with $8,623 for the median existing-home mortgage. This was the first year in FHA history when existinghome mortgages were typically higher than those on new homes. It is probably indicative of increased use of FHA insurance in the purchase of higher-priced existing properties, an increasing proportion of which are postwar structures.

On the average, new-home mortgages were 4 percent higher in 1953 than in 1952, while existing-home mortgages were 10 percent higher. Table 19 indicates that the proportions of new-home mortgages of less than $9,000 declined from 1952 to 1953, with increases

AMOUNT OF MORTGAGE

FHA - INSURED MORTGAGES ON SINGLE-FAMILY HOMES

TABLE 19.-Amount of mortgage for single-family homes, Sec. 203, selected years

occurring in virtually all the higher-amount brackets. The most significant increase, from 20 percent of the 1952 cases to 25 percent of those insured in 1953, occurred in the $9,000 to $9,999 range. These

shifts probably reflect the restoration of the maximum permissible loan amount ($9,450) and ratio of loan to value for mortgages on single-family owner-occupied dwellings insured under Section 203(b) (2) (C) of the National Housing Act, which followed the relaxation in September 1952 and the complete removal in April 1953 of credit control limitations. A comparable shift is evident in the distributions of the existing-home mortgage amounts from 1952 to 1953, but with the increases being appreciably greater in the higher brackets ($11,000 and up).

Mortgage amount as a percent of property value.-Mortgages insured under Section 203 during 1953 were in the majority of the cases at or near the maximum amounts permitted under the prevailing administrative rules. This is evident from the data presented in Table 20, which shows by property value groups the percentage distributions of the single-family home mortgages insured during the year by ratio of loan to value.

TABLE 20.-Ratio of loan to value by property value of single-family homes, Sec. 203, 1953

As indicated by the median loan-to-value ratios (second column of table) and the percentage distributions for the various value groups, home mortgages on properties valued by FHA at less than $9,000 were predominantly for amounts representing 90 to 95 percent of value; those on properties in the $9,000 to $10,999 value group, 86 to 90 percent of value; and most of those on properties valued at $12,000 or more, 76 to 80 percent of value. The scattering of cases in the value groups of $12,000 or more with the ratios of loan to value exceeding 80 percent represent for the most part transactions involving Alaska properties and to some extent properties in Hawaii and Guam, where the specified maximum mortgage amounts may be as much as one-half greater.

Existing-home mortgages tended to cluster near the 80 percent ratio of loan to value in nearly all value groups. Although this is the specified maximum for existing-construction cases, i. e., dwellings completed or under construction at time of application for mortgage insurance, the table indicates ratios in excess of 80 percent for about one-sixth of existing-home transactions. These for the most part involved properties that were approved for FHA insurance and constructed under FHA compliance inspection in a transaction previously insured by FHA and thus eligible for higher ratios of loan to value. By value groups, the proportion of cases having ratios higher than 80 percent ranged from 15 percent of those with properties valued at $11,000 to $11,999, to 45 percent of those valued at less than $7,000. As with new construction, the scattering of cases valued at $12,000 or more with ratios in excess of 80 percent represent transactions on properties in Alaska, Hawaii, or Guam, where higher maximum mortgage amounts and ratios of loan to value are permissible.

The loan-value distributions of new-home mortgages insured under Section 203 in 1953 moved decidedly upward from the 1952 level, while existing-home ratios registered only a very slight rise. This is shown by the data presented in Table 21, which compare the loan-value distributions of 1953 with those of the two preceding years, the initial postwar year 1946, and prewar 1940. Two events which influenced the trend of these distributions during 1953 involved the credit control limitations imposed by FHA in conformance with Regulation X of the Federal Reserve Board. These were the almost complete relaxation in September 1952 of limitations on maximum mortgage amounts and loan-value ratios, and the April 1953 elimination of the requirement that mortgagors' downpayments come only from savings or life insurance loans.

Compared with 1952, the ratio of loan to value for the typical newhome transaction in 1953 (86.5 percent) was about 3 percentage points higher, but the corresponding existing-home ratio (78.3 percent) rep