Full text of H.16 Capital Market Developments : December 8, 1969
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L.5.8 Confidential (F.R.) DECEMBER 8, 1969. O d f i ' M CAPITAL MARKET DEVELOPMENTS C a p i t a l Markets Section, Division of Research and Statistics, Board of Governors of the Federal R e s e r v e System, Washington, D. C. m a A J u * INDEX 3-5 Developments in the Corporate and Municipal Bond Markets 6-7 C a p i t a l Market Y i e l d s 8-13 C a p i t a l Market Volume 14-17 Stock Market 18-33 Mortgage Market SYMBOLS: Estimate Preliminary Revised Not available TABLE 1: Yields, Volume and Reception WEEK ENDING: 1969 - Nov. Dec. Dec. CORPORATE BOND MARKET ' : VOLUME; 2 PER CENT GROSS SOLD BY END -BONDS SCHEDULED OFFERINGS OF WEEK WITHIN 28 DAYS 7 14 21 28 8.13 8.27 8.44 8.67 7.26 7.29 7.38 7.48 261 365 241 185 67 81 79 91 991 1,071 903 733 5 12£y 8.85 7.59 520e 400e 99 586 WEEK ENDING: .1969 - Nov. YIELDS MOODY'S SEASONED NEW ISSUE 1 Aaa MUNICIPAL BOND MARKET VOLUME 2 YIELDS BOND BUYER PER CENT MOODY'S SOLD BY END GROSS SEASONED SEASONED 20 1 OF WEEK Aaa BOND INDEX . OFFERINGS BONDS SCHEDULED WITHIN 28 DAYS 7 14 21 28 5.75 5.78 5.95 6.05 6.11 6.17 6.36 6.58 246 83 314 219 48 67 59 86 903 954 913 683 5 12 £ / 6.34 6.72 n. a. 273 200e 97 437 1 Derived by adjusting to a Aaa basis, new issues of publicly-offered corporate bonds with call protection, rated A, Aa, or Aaa by Moody's Investors Service (except serial and convertible issues, offerings of natural gas pipeline and foreign companies, and bonds guaranteed by the Federal Government.) 2 Millions of dollars unless otherwise indicated. Note. Suv footnotes to Table 3 TABLE 2: Details on Inventories DATE. OFFERED 12/4 11/24 20.0 13.0 DATE OFFERED 1 RELEXSED ' 12/1 12/1 12/2 11/25 11/19 11/13 CORPORATE BONDS'IN SYNDICATE END OF LATEST WEEK ___ ORIGINAL! RATING AND YIELD 'CALL PROTECTION AMOUNT (MIL. S) Dec. 8.90 9.45 Aa Baa 5 ypars 5 years 35% 80% CORPORATE BONDS RELEASED FROM SYNDICATE DURING LATEST WEEK ORIGINAL INCREASE RATING AND ESTIMATED PRO-, COUPON ISSUER AMOUNT,. IN YIELD CALL PROT. PORTION RELEASED. YIELD 25.0 80.0 100.0 DATE 1969 - Nov. 9.00 9.50 Columbus & So. Ohio Electric General Tel. New York ESTIMATED PROPORTION SOLD 7 14 21 28 52/ Louisiana Pwr. & Lt. Pacific Gas & Elec. B.F. Goodrich " j INVENTORIES 1 MUNICIPALS • BLUE LIST . | IN SYNDICATE 555 241 560 164 609 223 r/583 142 515 83 9-3/8 9.00 8.25 | 1 9.25 8.81 8.25 + 18 + 25 + 35 | 1 5 yrs. 5 yrs. 10 yrs. 50% 20% 10% . CORPORATES IN SYNDICATE ! ; | A Aa A 90 88 68 1 1 59 16 N ,C. - No call protection. 1 figures in millions of dollars. Blue List is daily average for- v.vek ended, Friday,except for latest week Digitized forAll FRASER which is daily average of three days ended Wednesday. All other figures are as of Fri dav. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis ; BONDS IN SYNDICATE Millions of dollars CORPORATE BONDS IN SYNDICATE 200 100 MUNICIPAL BONDS IN SYNDICATE 300 200 100 SEPT. SEPT. DEC. '67 DEC. JUN. 1968 1969 \ SEPT. DEC. TABLE 3: High Grade Bond Yields NEW' CORPORATE Aaa 1 DATE MOODY'S SEASONED CORPORATE Aaa 2 U.S. GOVERNMENT 20-YEAR •CONSTANT MATURITIES 3 BOND BUYER'S SEASONED MUNICIPALS 4 1967 - High Low 6.55(12/8) 5.11(2/10) 6.24(2/29) 5.00(2/10) 5.73(11/7) 4.48(1/20) 4.45(12/7) 3.40(2/2) 1968 - High Low 7.02(12/13) 6.13(8/30) 6.55(1/27) 5.95(9/13) 5.90(1/20) 5.18(8/9) 4.85(1/26) 4.07(8/8) 1969 - High Low 8.85(12/5) 6.90(2/21) 7.59(12/5) 6.55(1/3) 6.84(11/12) 5.96(1/24) 6.72(12/5) 4.82(1/28) 8.27 8.44 8.67 7.29 7.38 7.50 6.71 6.84 6.80 6.17 6.36 6.58 8.85 7. 59 6.82 6.72 1969 - Nov. , Dec. 14 21 28 5£/• 1 New corporate issues, with call protection, adjusted (as described in footnote 1 of Table 1) to a Aaa basis. 2 Weekly average of daily figures. Average term of bonds included is 22-24 years. , 3 Weekly average of daily figures. 4 Thursday figures. The average rating of the 20 bonds used in this index falls midway between the four top groups as classified by Moody's Investors Service. Note--Highs and lows are for individual series and may be on different dates for different series. \ HIGH GRADE BOND YIELDS r n s NEW CORPORATE Aaa ' MOODY'S X CORPORATE Aaa U.S. GOVT. 20-YR. CONSTANT MATURITIES 4 B O N D BUYER MUNICIPAL 3 1965 1966 1967 1968 1969 TABLE 4: Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) GROSS PROCEEDS a ;i CORPORATE PERIOD LOCAL 2 1 1968 1967 2 ,075 2 ,045 2 ,098 1 ,771 1 ,608 1 ,799 1 ,684 1,418 ,2 ,362 2 ,748 2,076 2 530 1 ,428 1 ,866 2 ,411 2 ,015 1 ,518 2 ,674 July August September 2 450 1,,489 2,, 480e 2 ,143 1.,432 1:,557 2 ,589 2 ,481 1:,763 October . November December 2,, llOe 2,, 560e 2,, 300e 2,,129 1,,767 2,,054 r 2 ,409 i i :,500 2,,385 ,1st 2nd 3rd 4th 6, 218 7, 354 6,419e 6, 970e 5. 178 5,,704 5,133 5, 950 5.,464 6,,208 6,,832 6,,294 13, 522 19, 991e 26: 961e 10, 882 16, 015 21, 965 11,,672 18,,504 24,,798 1969p ! 1969P January February March April May Quarter Quarter Quarter Quarter 1st half. Three quarters Year & . 1967 1968 " 1 . 1,262 987 j 538 1 ,178 1,158 1 ,404 1,492 1,236 1,450 'I j . 1 ,801 1,109 734 1 ,318 1 ,143 1 ,395 1,130 1,254 1,497 '! - 1,092 804 534 1 ,469 1.,699 1,,444 950 860 1,340 - 1., 264 870e 600e 2,,230 1,,021 1,,115 975 1,401 1,182 2 ,787 3,,644 2,,430e 2, 734e 3,,840 3,,856 4,,612 4,,366 4,177 3,881 3,150 3,557 7,956 12,008 16, 574 8,059 11,209 14,766 ' | - 6,,431 8,,861 H , 595 Excluding finance companies ^ 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Year V 2 3 6, 170 3, 107 5,427 4, 785 5,654 5,308 6,063 6, 584 5,859 20, 973 23,814 - Securities and Exchange"!)ommission estimates of gross proceeds'. Investment Bankers Association of America estimates of principal amounts. Total gross proceeds excluding offerings of sales and consumer finance companies. TABLE 5: New Corporate Security Issues, Type of Issue and Issuer (In millions of dollars) QUARTET: OR MONTH TOTAL GROSS PROCEEDS BY TYPE OF ISSUE COMMON BONDS AND MEMO: PUBLICLY PRIVATELY PFD. ISSUES INCLUDED MFG. OFFERED PLACED STOCK FOREIGN CONVERTIBLE 1968 - Ill IV 1969 - I II Ille/ 5 5 6 7 6 133 951 218 354 419 2,,606 2,,555 2,,657 3,411 3,,194 1968 - Oct. Nov. Dec. 1969 - Jan. Feb. Mar. Apr. May June July Aug. Sept. e/ Oct. e/ Nov. ey 2,,129 1,,767 2,,055 2,,075 2,,045 2,,098 2,,748 2 ,076 2 ,530 2,,450 1, 489 2 ,480 2;,110 2.,560 1,,009 939 607 980 842 835 1 ,268 871 1.,272 1.,279 685 1,,230 960 1.,060 " / 1,361 1,922 1,540 1,673 1,460 1.,166 1,,474 2.,023 2 ,268 1 ,764 = 124 113 215 227 n. a. 1,037 902 1,355 1,126 673 595 362 965 636 395 509 649 510 514 591 319 550 500 500 525 466 483 460 807 755 830 694 744 579 485 700 650 1.,000 24 49 40 103 74 38 62 28 137 132 122 n. a. n. a. n. a. 365 211 326 376 578 401 430 463 233 206 167 300 50 110 1,657 1,712 1,407 1,773 1,954 GROSS PROCEEDS BY . TYPE OF ISSUER PUBLIC UTILITY 1,160 1,435 1,346 1,878 1,417 640 674 ~ 421 443 \ 651 319 403 627 513 315 491 404 513 784 569 392 691 702 i 881 492 382 505 700 420 450 . 640 750 620 Other issuers are extractive, railroad and other transportation, real estate and finance, and commercial and other. Source: Securities and Exchange Commission. Quarterly supplements are available. COMMUNICATIONS ISSUERS' 490 319 . 473 432 672 1,,825 2,483 2,,993 3,,266 2,368 115 162 41 186 56 231 44 197 191 286 126 260 120 190 700 741 1,,044 860 , 161 972 1.,405 915 946 792 476 1,,100 900 1,,000 !, TABLE 6:' Large Long-term Public Security Issues for New Capital (Other than U.S. Treasury) 1 ISSUER TYPE 2 AMOUNT (MILLIONS OF DOLLARS) December ,1 through December 8. 1969 \ COUPON MOODY'S OFFERRATE OR RAT) NG . ING ' :,ET INTI-:I<MATURITY Y1 ELI) CST COST Corporate First & Merchants Corp. Detroit Edison Co. Columbus & Southern Ohio Electric Company Pacific Telephone & Telegraph Union Tank Car Co. Conv. sub. debs. Gen. ref. 20.0 75.0 1994 1999 6.00 9.00 6.00 8.84 n.r. Aa 1st mtg. 20.0 1999 9.00 8.90 Aa 150.0 2004 9-1/8 9.10 Aaa 1989 9.30 9.30 A 1999 1974 9-5/8 9-3/8 9.40 9.38 Aa Baa 1989 9-1/2 9-1/2 Aa Debs. Equip, trust ctfs. 25.0 Meridian Investing and 40.0 Com. stk. Development Company 22.0 Com. stk. United Tank Car Company 20.0 Mississippi Pwr. & Lt. Co. 1st mtg. •1st mtg. 15.0 Northwest Natural Gas Co. Natural, 66s Pipeline 1st pipeline 30.0 Co. of America Natural Gas Pipeline Co. Gum. pfd., stk. 15.0 of America Gtd. Loan Ctfts.70.0 Traiiswortct Airlines, Inc. 81.7 Investment Properties Assoc,.Jr. Mtge 1985 1992 10.00 9.00 10.00 9.00 Baa n.r. T A B L E 6: ISSUER Lame Lonq term Public Security Issues for New Capital (continn. d) (Oilier than U.S. Treasury)1 TYPE ' AMOUNT (MILLIONS OF DOLLARS) ~ December 1 through December 1 COUPON I ' ' RATE OR .UTI'.RMATURITY ! NET INTER i;.< | EST COST j Y1LL1) State & local Government West Virginia, State of Montgomery Co., Maryland New York State Dormitory Authority Mecklenburg Co., N.'C. Richmond, Virginia 90.0 33.0 Rev. G.O. Rev. G.O. G.O. - 32.2 .< 14.3 —38.0 i Debs. Debs. Debs. 50.0 250.0 400.0 6.89 7.00 5.50-7. 15 5.60-7. 50 A-l A 1971-2000 1971-94 1971-90 7.55 6.45 6.28 6.00-7. 50 5.50-6.,60 5.40-6,.35 A Aa Aaa 1995 1973 1971 9-3/4 8.30 8.60 lliiiliii ' MOODY'S j RATING | 1970-94 1971-90 Other Quebec Hydro-Elec. Comm. F.N.M.A. F.N.H.A. 8. 1969. 9.88 8.30 8.60 over ; i• i".'i I ob i i t i on; t i 1 i t i i's ; t i t-s ; Rvv .S •. T . , nl. , rvwnv i ->n a n d TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury)1 (continued) ISSUER As of December 5, 1969. AMOUNT (MILLIONS OF DOHARS) TYPE APPROXIMATE DATE OF OFFERING Corporate Kane-Miller Corporation S.F. debs. Debs. Heller (Walter E.) & Co. General Public Utilities Corp Debs. Debs. Tenneco Corporation Bonds Public Service Co. Indiana 1st mtg. Ohio Power Company Public Service Elec. & Gas Company Prf. st k . Bonds Atlanta Gas & Light Co. *Georgia-Pacific Corporation Conv. sub, Conv. sub. *Becton Dickinson & Company Bonds Northern Illinois Gas Co. 1st mtg. Arkansas Pwr. & Light Co. *Florida Pwr. & Light Co. Bonds Southwestern Elec. Pwr. 1st mtg. Company 1st mtg. Baltimore-Gas & Elec. Co. General Telephone of Calif. 1st mtg. Debs. Pennsylvania Company South Carolina Elec. & Gas Bonds Conv. sub. Eastern .Air Lines, Inc. *Central Telphone & Utilities S.F. debs. Corporation Conv. sub. *Guardian Mtg. Investors Bonds Iowa Pwr. & Light Co. Debs. Ohio Bell Central. Pwr. & Light Co. Bonds 22.5 30.0 50.0 75.0 40.0 80.0 35.0 20.0 debs. 75.0 debs. 40.0 20.0. 25.0 50.0 - 60.0, debs. debs. 35.0 30.0 60.0 50.0 15.0 80.0 25.0 15.0 15.0 100.0 25.0 December December December December December December 8 8 8 9 9 9 December December December December December December December 9 9 10 10 10 11 11 December 15 December 16 December 16 December .16 December 17 December 17 December December January January January 17 22 5 6 • 7 TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury)1 ' l, w (continued) As of December 5, 1969. AMOUNT (MILLIONS ISSUER TYPE OF APPROXIMATE DATE OF OFFERING DOLLARS) State & local Government Texas ' „ Oregon, State of Oregon St. Bd. of Education Atlanta, Georgia *Indianapolis, Indiana Greater Chicago Metropolitar Sanitary Dist., Illinois Woodhaven S/D Mich. Oakland Co., Wisconsin *0wensboro, Kentucky Port of Seattle, Washington Los Angeles DWAPS *Peabody, Massachusetts Ohio, State,of \ Chicago, Illinois l, San Francisco San Francisco Port Comm. *Snohomish Co. Public Utility District Wheeler Ridge-Maricopa Wtr. Dist., Colorado p Sacramento Municipal Util. Dist., California *Hennepin, >. Ramsey, Anoka, Dakota, Washington, Scott, and Carver Cos. Metropolitan Council, Minnesota G.O. G.O. G.O, Rev. Rev. 15.0 40.0 16.0 18.0 10.0 December December December December December 8 9 9 10 10 G.O. G.O. Rev. Rev. Bonds Rev. G.O. Rev. Airport Rev. G.O. Rev. 20.0 12.0 11.9 52.0 16.0 39.0 15.9 50.0 56.0 49.1 11.0 December December December December December December December December December January January 11 15 16 16 16 17 16 16 12 14 Rev. 15.0 January 15 Rev. 16.0 January 21 Rev. 58.0 January 22 Rev. 11.0 January , 22 Other - None included 1 2 in table tor first time. Includes corporate and other issues of $15 million and over; Stace and local Government issues of $10 million andtoyer. Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues of Federal Agencies. Postponements this week were; Philadelphia, Pa. - 64.2 - no bids received. Chicago O'Hara International Airport, Illinois, - 52.0; postponed indefinitely. TABLE 8: Stock Prices and Volume TRADING VOLUME 2 STOCK PRICES 1 S&P 500 3 DATE 1967 - High Low 97.59(9/25) 80.38(1/3) D.J. - IND. AMEX 4 NYSE ' •AMEX 943.08(9/25) 24.52(12/29) 60.7(8/14) 786.41(1/3). 13.78(1/27) . 27.4(1/6) 33.5(10/27) 8.3(1/6) 1968 - High Low 108.37(11/29) 985.21(12/3) 33.24(12/20) 87.72(3/5) 825.13(3/21) 22.00(3/22) 82.1(6/7) 34.0(2/23) 45.4(6/7) 14.1(2/23) 1969 - High Low 105.94(5/16) 87.72(3/5) 985.21(12/3) 33.24(12/20) 825.13(3/21) 22.00(3/22) 82.1(6/7) 34.0(2/23) 45.4(6/7) 14.1(2/23) 98.12 97.32^^ 862.26 855.99 28.37 28.37 79.5 62.8 32.7 25.0 98.26 97.07 94.32 93.81 860.48 849.85 823.13 812.30 28.61 28.31 27.27 27.34 60.0 47.1 54.2 41.7 1969 - Oct. 24 31 Nov. . l 7 14 21 28 Dec. 5(791.73 • 793.03 . 26.62 Figures other than highs and lows are Fridays only. for the year and are not necessarily for Fridays. • f 26.4 19.1 18.1 15.9 55.6 20.6 Highs and lows are 2 Total number of shares traded per week (millions of shares). In the.past, trading was normally conducted 5 days a week for 5 1/2 hours per day, or 27 1/2 hours per week. From August 8 through August 20, 1967, daily trading was reduced to 4 hours per day or 20 hours per week. A 20-hour -week was also in effect from January 22 through March 1, 1968. From June 30 through December 31, 1968, the exchanges were open 5 1/2 hours for 4 days a week or 22 hours. From January 3 through July 3, 1969, the exchanges were open 4 hours each day, 20 hours per week. Beginning July 7, 1969 the exchanges have been open 4 1/2 hours each day, 22 1/2 hours per week. NYSE is New York Stock Exchange; AMEX is American Stock Exchange. 3 1941-43 = 10. 4 Average dollar value of shares listed. . 15 STOCK PRICES AND TRADING VOLUME AM EX ' D.J. (Ind) . 1300 Weekly . STOCK PRICES A M E X PRICE LEVEL INDEX/ ' > ':/v \n\ ; 1260 126 1220 122 1180 118 1140 114 1100 110 i 1060 106 1020 102 980 98 940 94 S&P s 500 ; | 900 860 820 780 740 AMEX TRADING VOLUME (TOTAL FOR WEEK) . 40 • i, . .t ill lilll : i • i-j 20 0 - NYSE TRADING VOLUME (TOTAL FOR WEEK) M !:!!!,! i 80 l 1st 60 40 20 0 1965 1966 1967 1968 1969 S&P (500) 130 a - TABLE 9: Security Credit 1 END OF PERIOD CREDIT EXTENDED TO MARGIN CUSTOMERS BY: BROKERS' | BANKS 2 | TOTAL NET CREDIT CUSTOMERS' CUSTOMERS' NET EXTENDED BY NET DEBIT BROKERS AND FREE CREDIT BALANCES | 1 BALANCES JDEALERS 3 Outstanding: 1968 - Sept. Oct. Nov. Dec. 1 6,390 6,250 6,200 6,200 2,520 2,560 2,630 2,710 8,910 8,810 8,830 8,900 1969 - Jan. 5,930 Feb. 5,750 Mar. 5,590 Apr. 5,570 May 5,670 June 5,340 5,170 July r/5,000 Aug. Sept.2/ 4,930 Change in Outstanding: 2,750 2,810 2,780 2,760 2,770 2,740 2,700 2,670 .2,620 8,680 8,560 8,370 8,330 8,440 8,080 7,870 7,670 ' 7,550 1968 " Sept. Oct. Nov. Dec. - -70 -140 -50 -- 2 3 -40 100 20 80 r 1 3,126 3,407 3,419 3,717 9,042 9,148 8,318 8,044 8,474 8,214 7,515 7,019 7,039 3,597 3,647 3,294 3,077 3,084 3,085 2,783 2,577 2,579 235 135 170 761 142 281 12 298 ' 5,590 5,452 5,610 6,073 ' 5,445 5,501 5,024 4,967 5', 390 5,129 4,732 4,442 4,460 85 -138 158 563 -220 -928 -120 -628 -120 50 -51 -9 -830 -190 -351 -477 -40 -274 -217 i-57 423 430 110 7 -360 -260 1 *261 -210 -699 -302 -397 -200 -496 -206 -290 -1-20 20 2 18 Margin debt, as reported by the New York Stock Exchange. Although margin debt until March 1968 included loans secured by U.S. governments, the amount of such loans included is thought to have been small. "Bank loans to others than brokers and dealers for purchasing cfr carrying securities other than U.S. governments." The difference between customers' net debit balances and customers' net tree credit balances, this figure represents the net credit extended by brokers and dealers to the nonfinancial public. NOTE: With the exception of bank loan data, figures are supplied by the New York Stock Exchange and are end of month data. Bank loans are for weekly reporting large commercial banks. Broker data includes loans for regulated securities; bank data includes loans for the purpose of purchasing or carrying any security, whether regulated or not. -270 1969 - Jan. Feb. -180 -160 Mar. -20 Apr.,, 100 ; . May -330 June July -170 Aug. - r/-170 Sept.jjy -70 1 30 40 70 80 8,724 8,859 9,029 9,970 40 60 -30 .-20 10 -30 -40 -30 -50 T A B L E 10: Savings Flows at Nonbank Depositary Intermediaries ($ millions) DATE I 1 I MUTUAL SAVINGS BANKS REGULAR DEPOSITS 3 NET NEW ANNUAL MONEY 2 GROWTH NET 1 , FLOW RATE / SAVINGS i SHARE CAPITAL ANNUAL MET GROWTH FLOW ... RATE 1 NET ' NEW •MONEY 2 TOTAL DEPOSITS ANNUAL NET GROWTH RATE 1 - FLOW . . NET NEW .MONEY 2 Not Seasonally Ad justed 1966 1967 1968 1969 to date i 2 , 557 5,082 4,186 2,107 4.9 9.3 7.0 -- 227 2,376 1,143 -684 3,584 10,687 7,396 3,684 181 -38 89 389 1,133 495 1968 - Aug. Sept. Oct. 238 505 202 -- 1969 - Aug. Sept. Oct. 95 303 -138 —— — 24 -269 -266 8 877 -379 3.2 9.4 5.9 -- -- 366 348 446 627 1,638 697 —- - 25 -104 -405 87 1,184 -517 - : -552 , 6,141 6,129 15,769 2,676 11,582 -782 5,791 • -- 3.8 9.4 6.3 -- -325 8,505 3,819 -1,466 --- 547 310 535 -- 1 - 373 -671 Seasonally Adjusted 1969 - May June July Aug. Sept. Oct. £ / 357 178 -47 191 172 26 1 2 6.6 3.3 -0.9 3.6 3.1 0.5 -—— --—— 498 491 -40 275 500 -101 4.5 4.4 -0.4 2. 5 4.5 -0.9 __ __ --— __ 855 669 -87 466 672 -75 5,2 4.0 . -0.5 2.7 4.0 -0.4 Annual growth rate for monthly data is the annualized monthly percentage increase in deposits. Net New Money is new deposits net of both withdrawals and interest. Data for S&Ls are for insured associations only, which represent 96% of industry total resources. 3 j Regular deposits at mutual savings banks exclude items.such as Christmas club and certain escrow accounts, which represent a very small part of total deposits. SOURCE: National Association of Mutual Savings Banks and Federal Home Loan Bank Board. __ —- - . SAVINGS FLOWS (seasonally adjusted) Monthly Millions of dollars 2000 1600 TOTAL 1200 800 400 400 1200 SAVINGS & LOANS 800 400 400 800 MUTUAL SAVINGS BANKS 400 400 1965 1966 1967 1968 1969 TABLE 11: Mortgage Commitments at Selected Thrift Institutions DATE TOTAL 1 1968 - sept. Oct. Nov. Dec. 9.1 9.5 9.7 9.7 1969 - Jan. 9.9 Feb. 10.1 10.3 Mar. Apr. 10.5 10.3 May June 10.2 July , 9.9 Aug. 9.5 9.1 Sept.2/ 1 1 OUTSTANDING COMMITMENTS 1 ' NET CHANGE . ALL ALL ' , MUTUAL ( SAVINGS SAVINGS & TOTAL SAVINGS & BANKS LOAN LOAN (N.Y. STATE) ASSOCIATIONS ASSOCIATIONS (Billions of Dollars, Sea sonally Adjusted) 1/ 6.2 6.4 6.5 6.66.7 6.9 7.0 7.2 7.1 7.0 6.8 6.5 6.3 | / ' 2.9 3.0 3.2 3.1 .14 .35 .27 -.01 3.2 3.2 3.3 3.3 3.2 3,2 3.1 3.0 2.8 .15 .25 .17 .19 -.19 -.09 -.28 -.43 , -.36 MUTUAL SAVINGS BANKS (N.Y. STATE) .10 .22 ' .10 .08 .08 .22 .09 .18 -.10 -.05 -.21 - .32 -.21 Based on data from Federal Home Loan Bank Board and Savings Banks Associations of New York State. Data for savings banks and S&L's include a minor amount of nonresidential commitments. S&L commitments include loans in process. Net changes are derived directly from unrounded outstandings levels as reported and after seasonal adjustment by Federal Reserve. Subtotals may not add to totals because of rounding. ,04: .13 .17 -.10 .07 .03 .08 . 01 -.09 -.04 -.08 -.11 -.15 7 MORTGAGE COMMITMENTS OUTSTANDING (seasonally adjusted) Billions of dollars Monthly TOTAL S&L'S N.Y.MSB'S Includes building loans beginning August 1967 1960 1962 1964 1966 1968 1970 T&RI F 12- Net Change in Mortgage Holdings 1 TOTAL INCLUDING FNMA-GNMA DATE 18,197 19,988 r/23,776 1968 - June July Aug Sept 1969 - June TOTAL FINANCIAL INSTITUTIONS SAVINGS & MUTUAL LOAN SAVINGS COMMERCIAL ASSOC. BANKS BANKS Not Seasonally Adjusted 4,648 2,914 r/2,465 15,874 18,191 /21,-268 r 1,683 t 1,995 1,997 2,387 1,688 2,124 1,987 seasonally Adjusted r/ 2,101 r/ 2,202 r/ 2,099 ?/ 2,117 Ir/ 2,032 r/-2,153 r/ 1,698 / 1,900 Sept. r/ 1,896 1969 - Jan. Feb.. LIFE INSURANCE COMPANIES jr/1,948 r/2,025 r/1,906 r/1,910 r/1,808 r/1,875 r/1,364 r/1,370 r/1,385 r/885 r/884 r/875 r/899 r/854 r/1,022 r/859 r/720 r/674 r/614 FNMA-GNMA NET CHANGE IN MORTGAGE HOLDINGS (seasonally adjusted) Monthly Billions of dollars 3.0 2;5 TOTAL, INCL. FNMA - GNMA 2.0 FINANCIAL INSTITUTIONS 1.5 1.0 1966 1967 1968 1969 TABLE 13: Net Increases in Mnrttwop Debt Outstanding Billions o f dollars, SAAR 2 RESIDENTIAL 2 1- to 4FAMILY MULTIFAMILY COMMERCIAL 1 MULTI-AND COMMERCIAL FARM QUARTER TOTAL 1965 - I II * III IV 24.9 25.2 25.8 26.6 18.6 1875 19.3 — — 19.6 15.1 15.5 15.8 3.5 3.5 3.8 3.8 4.2 4.5 4.4 4.6 8.0 8.1 8.4 7.9 2.2 2.1 2.2 2.4 1966 - I II III IV 28.3 24.2 18.4 15.6 19.0 15.6 10.8 '9.5 14.7 12.1 8.3 7.2 4.3 3.5 2.6 2.3 6.9 6.5 5.4 4.3 11.6 10.0 8.3 6.2 2.4 2.2 2.1 1.7 15.5 1967 - I n 20.4 Hp III > 26.3 IVp 28.6 9.9 13.7 19.1 20.9 6.8 10.5 15.3 16.5 3.0 3.3 3.8 4.4 3.8 4,8 4.8 5.1 7.3 8.1 8.8 . 8.8 1.-8 1.9 2.4 2.6 26.9 25.8 25.8 31.3 18.2 17.9 17.7 21.5 15.4 14.8 14.1 17.0 . . 2.8 3.1 2.5 4.5 6.2 5.7 6.4 8.1 9.4 8.7 10.2 11.8 2.4 2.3 1.8 1.7 1969 - I P 30.2 IIP 28.4 IIIP 26.6 21.6 20.7 19.5 18.0 16.5 15.6 3.6 4.2 3.8 6,4 5.3 5.1 10.4 ; 9.4 9.2 2.2 2.4 2.0 1968 - I P IIP IIII iv p 1 2 i5-a - Derived from data on mortgage debt outstanding from Federal Deposit Insurance Corporation, Federal Home Loan Bank Board, Institute of Life Insurance, National Association of Mutual Savings Banks, Departments of Commerce and Agriculture, Federal National Mortgage Association, Federal Housing Administration, Veterans Administration and Comptroller of the Currency. Separation of non-farm mortgage debt by type of property, where not available, and interpolations and extrapolations, where required, estimated by Federal . Home Loan Bank Board and the Federal Reserve. Residential mortgage debt includes nonfarm only and is sum of 1-to 4-family and multifamily mortgage debt combined. NET INCREASES IN MORTGAGE DEBT OUTSTANDING Quarterly Billions of dollars, seasonally adjusted annual rate 32 TOTAL 24 TOTAL RESIDENTIAL / 1-4 FAMILY COMMERCIAL MULTIFAMILY 1965 1967 1969 } TABLE 14: FNMA Weekly 1 X. 'Results COMMITMENTS IN $ MILLIONS IMPLICIT YIELD^(per cent) ACCEPTED 1-YEARll 1-YEAR \ 90-^ 90WEEK . TOTAL TOTAL 66& OVER MONTH & OVER OFFERED DAY DAY ' ENDED MONTH 252.5 150.5 22.9 Sept . 2 94.8 32.9 8.33 8.34 8.21 152.4 8 242.7 29.0 98.7 24.6 8.34 8.36 8.22 241.8 144.8 33.4 15 81.7 29.7 8.36 8.40 8.24 247.5 145.1 38.1 22 72.6 34.3 8.40 8.44 8.27 144.2 29 257.7 45.5 69.5 29.2 8.45 8.48 8.30 Oct. Nov. / Dec. 6 13 20 27 3 10 17 24 1 5£/ 251.0 217.7 161.6 120.6 147.4 145.7 134.9 118.4 230.2 267.4 242.6 233.4 81.7 101.9 122.7 122.3 235.9 41.1 48.6 35.7 37.7 31. 0 45.1 45.0 41.6 66.0 50.1 60.8 52.8 40.3 46.9 38.3 28.0 8.50 8.54 8.58 8.54 8.52 8.59 8.63 8.60 8.34 8.39 8.44 8.45 44.1 50.6 67.3 67.7 6.6 6.2 10.4 13.0 8.44 8.47 8.50 8.53 8.49 8.49 8.51 8.54 8.45 8.47 8.48 8.50 29.4 8.57 8.58 8.52 120.6 24 .2 •i 67.0 (120.0) 3/ - Note: Under the FNMA auction system, approved/ sellers of Governmentr underwritten mortgages bid for FNMA forward purchase commitments, subject to an over-all dollar limit announced by FNMA in advance. Bids accepted by FNMA are for delivery at the seller's option, and at any time within the specified period. Bids on proposed homes relate to construction not yet started on which mortgages may be delivered only after completion and occupancy. 1 For "proposed construction" ;of new homes only. ^Average secondary market yield after allowance for commitment fee and required purchase and holding of FNMA stock, assuming prepayment of 15 years for 30-year Government-underwritten mortgages. Yields shown •are gross, before deduction of 50 basis points fee paid by investors to servicers. FNMA announced limit of accepted bids for next week's auction. 27 FNMA WEEKLY "AUCTION" RESULTS $ Millions 120 AMOUNT OF ACCEPTED BIDS BY COMMITMENT PERIOD. 100 80 1 YEAR AND OVER 6 MONTHS 20 3 MONTHS Per cent 8.6 - I M P L I C I T YIELD 6-MONTH COMMITMENTS 8.0 7.4 _J 6.8 Millions 400 300 200 TOTAL BIDS RECEIVED 100 TOTAL BIDS ACCEPTED JUNE AUG. OCT. 1968 DEC. FEB. JUNE 1969 AUG. OCT. DEC. TABLE 15: Private Housing Starts and Permits STARTS DATE 1968 - Sept. Oct. Nov. Dec. UNADJUSTED TYPE OF FINANCING FHA VA I OTHER SEASONALLY ADJUSTED ANNUAL RATE TOTAL 1-FAMILY 2 OR MORE 1,592 1,570 1,733 1,509 944 965 905 922 648 605 828 585 134,3 140.8. 127.1 96.4 1969 - Jan. 1,878 Feb. 1,686 Mar. 1,584 • Apr. 1,563 May L,509 June 1,469 July 1,371 L,384 Aug Sept .£/ L,533 Oct. £/l ,342 1,066 812 711 756 766 626 661 101.5 90.0 131.9 159.0 155.5 147.3 125.2 124.9 128.6 118.7 975 828 . 797 883 808 765 723 843 765 606 661 690 577 18.6 21.4 17.5 16.3 14.2 13.2 18.9 23.0 21; 1 21.5 20.8 22.4 18.3 24.9 BUILDING PERMITS (SEASONALLY ADJUSTED ANNUAL RATE) 2 4.6 5.3 5.2 4.4 111.1 114.0 105.4 75.7 1,393 1,378 1,425 1,463 3.8 3.5 3.9 4.4 4.3 4.6 4.7 4.2 4.8 5.0 83.5 73.3 109.1 131.6 130.1 1,403 1,477 1,421 1,502 1,323 1,340 121.2 99.7 98.3 105.5 88.8 1,228 1,245 1,201 1,119 Total starts are Census estimates including farm for both permit-issuing and noi,-issuing areas. A dwelling unit is started when excavation begins; all units in an apartment structure are considered started at that time. FHA and VA starts are units started under commitments by these agencies to insure or guarantee the mortgages. As reported by FHA and VA, a unit is started when a field office receives the first compliance inspection report, which is made before footings _are poured in some cases but normally after the foundations have been completed. Other starts are derived as a residual, although total and FHA and VA starts are not strictly comparable in concept or timing; other starts include both units financed by conventional mortgages and units without mortgages. Building permits before January 1963 are Census estimates for about 10,000 areas identified as having a local building permit system in 1959. Estimates beginning^ January 1963 are for approximately 12,000 and beginning January 1967 13,000, or all known permit-issuing places. Unlike starts, seasonally adjusted building permits reflect direct adjustment for differences in. the number of working days per month, as well as other differences in timing and coverage. PRIVATE HOUSING STARTS AND PERMITS Monthly .annual rates' Millions of units " 2.0 SEASONALLY ADJUSTED HOUSING STARTS 16 1.2 BUILDING PERMITS (in issuing areas) CHANGE IN SERltS PER CENT OF UNADJUSTED TOTAL STARTS MULTI-FAMILY 40 GOVERNMENT UNDERWRITTEN 1963 1965 1967 1969 TABLE 16: Mortgage and Bond Yields FHA MORTGAGES 1957 - High 1968 - Low 1959-60 - High 1961-66 - Low 1966 - High 1967 - High Low 1968 - High Low 5.63 5.35 6.26 5.43 6.73 n. a. n.a. n. a. n.a. n.a. n.a. n.a. 5.44 6.81 6.81 6.29 7.52 6.78 CONVENSPREAD BETIONAL ' TWEEN YIELDS ON CONV. & MORTFHA MORTGAGES 3 GAGES 6.00 .47 5.55 .15 6.30 .23 5.80 .25 6.70 .30 6.65 ' .11 6.40 -.12 7.40 .12 6.75 -.27 1969 - Apr. May June July Aug. Sept. Oct. n. a. n.a. n.a. n.a. n.a. n. a. n.a. 8.06 8.06 8.38 8.36 8.36 8.40 8.48 7.75 7.75 8.00 8.10 8.20 8.25 8.30 DATE 2 . 25-YEAR 30-YEAR 1 2e -.31 -.31 -.35 -.26 -.16 -.15 -.18 1 NEW Aaa CORPORATE BONDS 4 4.94 3.65 5.25 4.41 5.82 6.51 5.18 6.79 6.15 7.17 7.22 7.58 7.63 7.65 7.98 7.89 SPREAD BETWEEN YIELDS ON.NEW CORPORATE BONDS AND FHA MORTGAGES 1.58 .88 1.69 . 77 1.16 1.28 .27 1.20 .26 1 .89 .84 .77 .73 .71 .42 .59 Neither mortgage nor bond yields include allowance for servicing costs which are much higher for mortgages than for bonds. Generally, bonds pay interest semiannually; mortgages, monthly. Mortgage yields, if computed as equivalent to a semi-annual interest investment, would be slightly higher than given in the table.. • Based on FHA-field-office opinions about average bid prices in the private secondary market for new-home mortgages for immediate delivery. Separate data available for 25-year and—beginning July 1961--30-year mortgages with minimum downpayments, weighted by probable volume of transactions. Yields computed by FHA, assuming prepayment period of 12 years for 25-year mortgages and 15 years for 30-year mortgages.. Over the period for which they can be compared, the movement of the two mortgage yield series has been similar. Dashed lines indicate periods of adjustment to changes in contractual interest rates. Based on FHA-field-office opinion on typical interest rates (rounded) on conventional first mortgages prevailing in the market areas of .insuring.officecities. Beginning with April 1960, rate relates only to new-home mortgages; prior to that date, rate related to both new as well as existing-home mortgages. Dashed line indicates this change in the series. See note for Table 1. MORTGAGE AND BOND YIELDS Monthly 9 HOME MORTGAGES: . CONVENTIONAL Aaa CORPORATE BONDS; V NEW ISSUES Y I E L D S P R E A D (FHA MORTGAGE VS. NEW ISSUE Aaa CORPORATE BONDS) 200 — 1962 1964 1966 1968 100 TABLE 17: Conventional Mortgage Terms DATE 1968 Oct. Nov. 'Dec. NEW HOMES CON- FEES & TRACT CHARGES EFFEC- MATURITY RATE (PER (YEARS) TIVE CENT) RATE (PER CENT) 3 2 LOAN/ PRICE LOAN RATIO AMT. (PER ($000) CENT) 1 EXISTING HOMES. CON- FEES & LOAN/ TRACT CHARGES EFFEC- MATU- PRICE (PER RATE TIVE RITY RATIO CENT) RATE (YEARS) (PER (PER CENT) 3 CENT) 2 LOAN AMT. ($000) 7.23 7.21 7.23 25 .6 25 .4 25 .9 74.5 74.1 74.0 22.7 22.5 24.7 7 .09 7 .07 7 .09 0.84 .0.82 0.85 7.22 7.21 7.23 22.5 22 .7 23 .3 72 .4 72 .9 73 .2 18.3 18.9 20.4 0.84 7.30 7.16 7.26 0.81 7.39 7.32 0.93 7.47 0.96 7.62 7.47 0.88 - 7.65 7.50 7.62 0.84 7.76 7.76 0.92 7.91 7.86 - 0.86 8.00 7.89 0.92 8.05 7.97 0.89 8.12 '25..6 25.,6 25.,8 25.,4 25.,8 25. 6 25. 5 25. 2 25.,3 25.4 73.6 73.3 73.8 72.6 73.2 73.0 72.0 72.3 • 72.4 73.1 24.1 23.5 24.0 24.8 25.0 24.9 24.5 24.3 24.7 25.1 7..18 7.,28 7.,35 7.,46 7..54 7. 64 7. 79 7, 90 7.,92 7.,98 0.86 0.86 0.84 0.85 0.83 0.86 0.91 0.93 0.92 0.91 7.32 7.42 7.49 7.60 7.68 7.79 7.94 8.05 8.08 8.13 22 .8 22..9 23..0 23..0 22..7 22. 8 22. 8 22. 6 22..2 22. 3 72,.6 72..8 72..7 71.,8 71.9 71. 4 71. 7 71. 2 70. 7 20.0 19.6 20.2 19.9 19.7 20.1 20.1 19.8 19.2 19.6 7.09 7.07 7.09 0.88 0.84 0.89 1969 Jan/ Feb. Mar. ~ AprJ May •June July Aug. Sept. Oct. £/ 70.3 1 Compiled by Federal Home Loan Bank Board in cooperation with Federal Deposit Insurance Corporation. Data are weighted averages based on probability sample survey of characteristics of conventional first mortgages originated by major institutional lender groups (including mortgage companies) for purchase of single family homes. Data exclude loans for refinancing, reconditioning or modernization; construction loans to home-builders; and permanent loans which are coupled with construction loans to ownerbuilders.. Related series on conventional mortgage rates only, based oncunweighted opinions of field-office directors of the Federal Housing Administration, are available somewhat sooner than the results of the EHLBB-FDIC survey, and are included-in the case of new home mortgage rates--in Table 16. 2 Fees and charges--expressed as a percentage of the principal mortgage amount--include loan commissions, fees, discounts, and other charges which provide added income to the lender and are paid by the borrower. They exclude any closing costs related solely to transfer of property ownership. 3 Includes fees & charges amortized over a 10 year period in addition to the contract interest rate. CONVENTIONAL MORTGAGE TERMS Monthly Years MATURITY NEW EXISTING 20 80 LOAN/PRICE RATIO NEW EXISTING 70 65 1963 1965 1967 1969 * CHANGE IN SERIES
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