An unhappy victim of the Federal Reserve's "tight money" policy has been the housebuilding industry. The banks, with more borrowers than money available, have looked down their noses at Government-backed mortgage loans with their relatively low (4½%) yields in favor of higher returns in other fields. Result: a drop in new housing starts from 1,329,000 in 1955 to the current rate of 1,100,000 a year. Last week, to sweeten up such loans for the bankersand thus make more funds available to home buildersthe Government raised the interest rate on new FHA-backed mortgage loans to 5%. The order did not affect Veterans...
National Affairs: More Money for Housing
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