THE HOUSING SLUMP: The Housing Slump

How Much Should the Government Help?

IN THE current credit pinch, the loudest howls are from the U.S. homebuilding industry. Construction of new houses dropped from a near-record 1,300,000 new homes in 1955 to an estimated 1,100,000 this year. The chief reason is that the lending market for low-interest Veterans Administration and FHA-insured mortgages has dried up. Housing starts with VA and FHA mortgages have plummeted 30% to 467,400 units v. only a 1% drop for homes without Government-guaranteed mortgages. Last week the big argument was over the U.S. Government's newest move to help...

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