data not available on the number and dollar amount of construction loans for all lenders, but no data are available showing the rate of interest charged, the amount loaned in relation to the amount of construction contract, and how rapidly funds are advanced on the loan during construction. Also, data are lacking on how these terms on construction loans vary over the period of a building cycle. More information is desirable on the terms for financing the erection of prefabricated homes.

Home purchase loans, shown in table 88, are for purchases of used or newly constructed dwellings. Refinancing loans refer to those loans which were held by one mortgagee and refinanced by another. According to the definition of the Federal Home Loan Bank Administration, such loans do not involve property title transfers. In the case of lending for repair and reconditioning, if a lender rewrites one of his own mortgages in order to make additional funds available, only the additional funds granted are included in the data. Loans for "all other purposes" include funds granted for payment of taxes and insurance and for any other purpose not noted above. All loans made on other than one- to four-family structures are also included in this group.

There appears to be some unavoidable overlapping of loan purpose types. Part of a loan for home purchase, refinancing or "other purpose" may be for repair and reconditioning. Where an institution neglects to report these parts separately, it is not possible to subtract the repair and reconditioning funds from the total. Associations, however, are instructed to divide these

loans in accordance with the respective loan purpose types in their reports.

An explanation of the sources and background of the new lending data, which is estimated by class of association, appears in the narrative which discusses table 96, chapter IV of part 3, where new lending activity by class of lender is presented.

The statistics on the outstanding residential mortgage debt show the relationship of mortgage debt to total private and public obligations, annual change, and the home mortgage holdings of various types of lenders.

The outstanding balance of mortgage obligations is affected by mortgage terminations and reductions in the principal of mortgages in force, on the one hand, and new mortgage loans made, on the other. As such, it is a net figure representing the mortgage lenders' investment in residential real estate.

Trends of Outstanding Debt

Table 89 shows nonfarm residential mortgage debt since 1929 and its relationship to total private and public debt. Prior to 1942, residential mortgage debt made up between 12 and 16 percent of the amount of total public and private

debt combined. Since that year, the proportion has declined rapidly as the public debt has soared to unprecedented heights to meet the heavy costs of World War II. At the close of 1945, residential mortgage debt comprised less than 7 percent of combined public and private debt. The percentage of total private debt represented by mortgages on residential real estate, however, fluctuated between 18 and 21 percent from 1929 to 1945.

Data on private debt are estimated by the Department of Commerce from reports of various Government agencies, such as the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Bureau of Internal Revenue, the Interstate Commerce Commission, and the Departments of Agriculture and Treasury. These agencies compile data on debt from reports received from private business concerns. Statistics on public debt are compiled by the Com

merce Department from Treasury Department records and various reports of the Bureau of the Census. In addition, the Commerce Department makes use of various private publications, such as reports of the National Industrial Conference Board for its basic data.

Distribution of Home Mortgage Debt

Table 90 expands the data on mortgage debt on one- to four-family nonfarm dwellings, which appear in table 89, taking the figures back to 1925

and showing the distribution of outstanding home mortgage debt by type of lender.

Data on outstanding debt on home mortgage loans are estimated each year by the Federal Home Loan Bank Administration from various sources. Information on mortgages held by Federal Home Loan Bank member associations is obtained from annual reports of member associations and represent 100 percent coverage. Data for nonmember associations are based on annual reports of State savings and loan supervisory authorities and

• Preliminary.

Source: Federal Home Loan Bank Administration.

represent complete coverage except for associations in one State where reports are not required. However, estimates of outstanding home mortgage loans for the nonmember associations in this State are based on such information about these institutions as is available, i. e., assets and the number of associations, and the trend in mortgage holdings of Federal Home Loan Bank member associations in the State. Data on the home mortgage loans held by life-insurance companies are obtained from reports submitted by a large group of these companies to the Federal Home Loan Bank Administration. The reporting life-insurance companies hold more than 95 percent of the assets of all our legal reserve life-insurance companies.

Figures on outstanding amount of home mortgages held by mutual savings and commercial banks are estimated from reports of the Comptroller of the Currency which show total residential mortgages held by these institutions. The statistical technique employed in estimating mortgage debt on one- to four-family dwellings from total residential mortgages held by these institutions involves estimation of the turn-over rate of mortgage debt and the relative movements of new mortgage credit extended by these institutions, and the dollar amount of mortgages of $20,000 or less which they originate. Some of the data on residential mortgage holdings of mutual savings banks are supplied by the National Association of Mutual Savings Banks. Home Owners' Loan Corporation figures are based on the Corporation's own records.

Estimates of outstanding home mortgage debt held by "individuals and others," for the years prior to 1939, were based on figures from such sources as the Financial Survey of Urban Housing, Home Owners' Loan Corporation records, reports and estimates of the National Association of Real Estate Boards, the Mortgage Bankers' Association, the New York State Mortgage Commission and special surveys of the Federal Home Loan Bank Administration. More recent estimates, based on mortgage recording data and other available reports, are considered more reliable than the estimates for previous years. In view of the lack of source data, the figures on home mortgage holdings of "individual and others" are considered to be the weakest estimates of the series. However, since they are the best data available on such mortgage holdings, they are presented in this chapter.

Trend of Outstanding Home Mortgage Debt

Table 91 and chart 25 reveal the trend in estimates of home mortgage investment since 1925, showing the dollar amount of mortgages originated during each year, reductions in mortgage investment during the year (this reflects mortgage terminations and reductions in the principal of mortgages outstanding), and annual net change in the home mortgage investment, that is the unpaid balance of mortgages held.

In general, the investment in home mortgages fluctuated between $15 billion and $21 billion between 1925 and 1945. However, during 1946, the investment in home mortgages rose $4.6 billion to an estimated $24.6 billion-a new high record. This increase results from the gross addition of substantially more than $9 billion of new mortgage loans on one- to four-family properties made during the year and a gross reduction of mortgage investments amounting to less than $5 billion. It will be noted that, during the war years 1942 through 1944, the net mortgage investment declined each year despite the yearly addition of more than $3 billion in new mortgages. This reduction in home mortgage investment reflects the