such factors as variations in the size of typical transactions, the use of the Torrens system of land transfer (under which costs of title search are lower), and differences in financing charges and costs of repairs. Another possible factor was the tendency on the part of builders in some communities to absorb part or all of the closing costs in the sale price in order to promote the sale of their properties.

Although the average mortgage amount for all existing homes exceeded that reported for all new dwellings, within most corresponding value groups the new-home averages were greater, reflecting higher ratios of loan to value. The spread between the average mortgage amounts and ratios of loan to value for new and existing homes narrowed as values increased, and for properties valued at $12,000 or more the differences were slight. This, of course, was a reflection of the schedule of maximum loan-to-value ratios which was effective for most of the cases insured in 1954. In slightly over half the States and Territories, new-home mortgage amounts averaged more than those reported for existing-home transactions, although new-home property values were higher in only one-third of the States and Territories. New-home ratios of loan to value exceeded the existing-home ratios in nearly every State and Territory. Average mortgage amounts for new homes ranged from $7,837 in Maryland to $10,657 in Connecticut and $18,042 in Alaska, with existing homes registering low averages of $6,737 in Puerto Rico and $7,538 in Vermont and highs of $15,395 in Alaska, $11,028 in the District of Columbia, and $10,592 in Nevada. In slightly less than one-half of the States and Territories, new-home mortgages averaged between $8,000 and $8,999 and in over one-third between $9,000 and $9,999; existing-home mortgages in about three-fifths of the States and Territories averaged from $9,000 to $10,999. Average loan-value ratios in most areas ranged from 79 to 84.9 percent for new-home transactions and from 75 to 79.9 percent for existing homes.

Sale prices and amount of total requirements for new homes in about half of the States and Territories averaged from $10,000 to $11,999, while existing-homes average sale prices and amounts of total requirements for existing homes occurred most frequently in the $11,500 to $13,000 range. Average sale prices ranged from $8,758 in New Hampshire to $13,650 in Connecticut for new homes and from $7,106 in Puerto Rico and $9,596 in Maine to $15,869 in the District of Columbia, $15,068 in Nevada, and $18,185 in Alaska for existing homes.

Property Characteristics.-As is evident in Tables 68 and 69, the FHA-estimated replacement cost of properties averaged higher than FHA valuations in all the value classes, both for the country as a whole and in each State and Territory. This is in accord with a

TABLE 68

Property characteristics by property value and by States, new 1-family homes,

Sec. 203, 1954

fundamental precept of the FHA valuation policy, that replacement costs establish an upper limit to value, inasmuch, as stated in the FHA Underwriting Manual, "a typical buyer acting intelligently would not be warranted in paying more for property than the cost of producing an equivalent property." Because of depreciation (primarily obsolescence), the difference between value and replacement cost is noticeably greater for existing properties than for new. For Section 203 new-home transactions closed in 1954, value averaged about 97 percent of replacement cost; for existing homes, the comparable figure was 87 percent. The lower values of existing properties reflect not only the shorter economic life of the structure but also the influence of obsolescence on such items as structural design, the amounts and types of equipment, and, occasionally, the location.

On both new and existing homes, the ratio of value to replacement cost increased with higher property values, ranging from 93 percent for new homes valued at less than $7,000 to about 98 percent for those in the higher value brackets and from 72 percent for existing homes of less than $7,000 value to slightly over 90 percent for the higher priced existing properties. This is indicative of the greater influence of going market prices on values of lower-priced properties. Reflecting the influence of market conditions in various localities, sale prices exerted more downward pull on property values in these lower brackets than in the higher value categories. The reason is probably a more plentiful supply of housing and keener competition in the lower value

groups.

By States and Territories, average value-cost ratios for new homes were in a relatively narrow band of 91 to 99 percent, with most States bracketed between 96 and 98 percent. Existing-home ratios, reflecting variations in age, condition, and demand are more diffused, extending from 75 to 96 percent with heavier incidence of averages in the 84 to 86 percent and 89 to 94 percent ranges.

Market prices of land involved in the Section 203 transactions of 1954 averaged about $1,450 for new homes, or 13 percent of total property value, and nearly $1,600 for existing homes, slightly more than 13 percent of total value.16 Land prices of both new and existing properties moved upward as property values increased. However, land prices of the higher-value properties ($14,000 or more) accounted for somewhat larger proportions of total value as compared with lower-price homes, possibly because of the larger size, better dimensions, and more desirable location of the sites. Frequently the higher priced new homes were contract-built on lots available in fully de

1 Land prices of Hawaiian properties are excluded from the United States summary portion of Tables 68 and 69 because the inordinately high land costs of that Territory create a bias in average land prices in those value groups where the proportion of Hawaiian cases was relatively high. With Hawaii included, the average land price for new homes in the $13,000 value group would have been $300 more, and in the $18,000 and $20,000 or more groups $200 to $300 more.

veloped neighborhoods and having higher market values. In the value groups below $9,000, existing homes had higher land prices than new homes, probably because of their being located in neighborhoods closer to the centers of cities and having better shopping, transportation, and community facilities. In these same groups the higher ratios of land price to total value for the existing homes are indicative of a minimum of depreciation in land value compared with the more substantial depreciation in the structure value.

Also affecting the averages of market price and land shown in the United States summary portion of the tables are variations in land prices throughout the country. For the Nation proper, land prices for new homes ranged from $694 in New Hampshire to $1,879 in Missouri and for existing homes from $949 in Maine to $2,171 in Louisiana. In most States, land prices averaged between $1,000 and $1,500 for new homes and $1,250 to $1,750 for existing properties, with new-home averages exceeding existing-home averages in all but a few States. The land proportion of property value for new homes ranged from 71⁄2 percent in New Hampshire to 15 percent in California, averaging in the greater number of States from 10 to 14 percent. Similarly for existing homes, the average ratio of land price to total value in most States ranged from 10 to 14 percent, with a high of 171⁄2 percent in Louisiana and a low of 10 percent in Idaho and Maine.

Special terrain problems in Hawaii and Puerto Rico account for the exceedingly high land prices representing substantially larger proportions of total property value. Although land prices are unusually high in Alaska, the ratio of land price to property value is not above average.

In most States, land for existing-home properties represented larger proportions of total property value than in new-home transactions, primarily because of the comparatively greater depreciation of existing structures as compared with land.

Other property characteristics information presented in Tables 68 and 69 are averages of calculated area, number of rooms and number of bedrooms, and percentage of structures provided with garage facilities. The data dealing with the size of the structure, i. e., area, room count and bedroom count, are discussed in more detail in a subsequent portion of this report dealing with the size of the FHA homes in 1954 and the relation of size to property values.

Garage facilities were provided in two-thirds of the new homes and in nearly four-fifths of the existing, the frequency increasing as property values rose. Within virtually all value groups, the proportion of existing homes with garages exceeded the new.

Generally, the highest proportions of new homes with auto shelters were found in the Southern and Western States, where they also may