Changing Housing Climate

Report Outline
Hesitation in the Market for Housing
Extent of Current Foreclosure Problem
Patterns of Demand in Housing Market
Special Focus

Hesitation in the Market for Housing

Senate Hearing on Rise in Foreclosures

The Market for residential housing appears to be entering a new and potentially hazardous phase after nearly two decades of record prosperity. The supply of one-family houses and also of multi-unit structures seems for the time being to have caught up with demand in many metropolitan areas. With inflation no longer assuring home owners of an almost automatic profit if they sell, the “trading up” process has been impeded. More and more of the 33 million families who own their own homes feel locked into their present living arrangements. At the same time, already high land prices and construction costs have put the single-family house beyond the means of many families who would like to become home owners.

Foreclosure rates—the fever chart of the home building industry—are at the highest level since 1939 and probably will continue to rise through the 1960s. The Senate Banking and Currency Committee's Housing subcommittee plans to open hearings late this month on the rise in foreclosures of mortgages on houses and apartment buildings insured by the Federal Housing Administration.

Questions on the future direction of housing construction have been raised by an apartment house invasion of the suburbs. “A churned-up market” is the term House & Home has used to characterize housing in 1963. The industry publication notes that “Alertness and imagination [on the part of builders and developers] may win, but boldness has more than the normal chance of coming a cropper.”