Full text of H.16 Capital Market Developments : February 8, 1971
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DECONTROLLED AFTER SIX MOUTHS c o m - . / - L.5.8" C o n f i d e n t i a l ( F . R . ) February 3 , 3< J QjolqulU CAPITAL MARKET DEVELOPMENTS [. Capital Markets Section, Division of Research and Statistics, I Board tfffifty*.mnr*of the Federal Reserve System, Washington, D. C. - fTlox^cd i 1971 INDEX 3-5 D e v e l o p m e n t s in t h e C o r p o r a t e and Municipal Bond M a r k e t s 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 V o l u m e 14-17 Stock Market 18-33 Mortgage Market SYMBOLS: e Estimate p Preliminary r n.a. Revised Not a v a i l a b l e — TABLE 1: Yields, Volume and Reception WEEK ENDING: 1971 - Jan. 1 * ; S i - Feb. 1 8 15 22 29 5 12 WEEK ENDING: 1971 - Jan. YIELDS MOODY'S SEASONED NEW ISSUE 1 Aaa 7.59 7.31 6.98 6.76 7.48 7.45 7.42 7.36 7.19 6.91 7.10 YIELDS MOODY'S BOND BUYER SEASONED SEASONED 20 Aaa BOND INDEX CORPORATE BOND MARKET VOLUME 2 PER CENT GROSS SOLD BY END BONDS SCHEDULED OFFERINGS OF WEEK WITHIN 28 DAYS 345 797 330 525 80 95 93 69 384 635e 64 n.a. MUNICIPAL BOND MARKET VOLUME 2 PER CENT GROSS SOLD BY END OFFERINGS OF WEEK 1 8 15 22 29 5.25 5.40 5.00 4.95 4.95 5.58 5.74 5.39 5.13 5.16 507 716 Feb. 5 Feb. 12 5.10 5.27 n.a. 333 455e 42 561 822 773 1,054 748 n.a. n.a. n,a. BONDS SCHEDULED WITHIN 28 DAYS 82 86 94 81 48 1,377 1,653 1,278 1,201 1,027 72 1,147 n.a. 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.) • Millions of dollars unless otherwise indicated. Note: See footnotes to Table 3 TABLE 2: Details on Inventories DATE OFFERED [ 1 2/4 2/3 2# 2/2 2/1 1/28 1/27 1/26 CORPORATE BONDS IN SYNDICATE END OF LATEST WEEK ]ORIGINAL F RATING AND ISSUER COUPON 1 YIELD (CALL PROTECTION AMOUNT (MIL. $) 30.0 40.0 65.0 40.0 60.0 50.0 15.0 200.0 OFFERED Texas Pwr. & Lt. Pub. Svc. Colorado Niagara Mohawk Pwr. Pacific Pwr. & Lt. Perm. Pwr. & Lt. Assoc. Dry Goods Gen'l Tel. Wise. S. Western Bell Tel. 7-1/8 7-1/4 7-3/8 7-7/8 7-1/4 7-1/8 7-1/8 6-7/8 6., 95 7.,17 7,.25 7..90 7,.15 7..15 7,.10 6..80 Aaa 6 yrs 6 yrs Aa 6 yrs. A Baa 6 yrs. 6 yrs. Aa A 10 yrs. 6 yrs. A Aaa 6 yrs. ESTIMATED PROPORTION SOLD ' 25% 657. 35% 50% 35% 90% 50% 25% CORPORATE BONDS RELEASED FROM SYNDICATE DURING LATEST WEEK ORIGINAL INCREASE RATING AND ESTIMATED PROISSUER COUPON IN YIELD CALL PROT. PORTION RELEASEE YIELD RELEASED AMOUNT None INVENTORIES I MUNICIPALS BLUE LIST 1 IN SYNDICATE DATE 1971 - Jan. 8 15 22 29 Feb. 1 1 5 810 711 689 r856 909 CORPORATES IN SYNDICATE 196 96 111 i 350 95 48 22 162 227 308 N.C. - No call protection. All figures in millions of dollars. Blue List is daily average for week ended Friday, except for latest week which is daily average of three days ended Wednesday. All other figures are as of Friday. * „ TABLE 3: High Grade Bond Yields DATE NEW CORPORATE Aaa1 MOODY'S SEASONED CORPORATE Aaa 2 U.S. GOVERNMENT 20-YEAR CONSTANT MATURITIES 3 • BOND BUYER'S SEASONED MUNICIPALS 4 1968 - High Low 7.02 6.13 (12/13) (8/30) 6.55 5,95 (1/27) (9/13) 5.90 5.18 (1/20) (8/9) 4.85 4.07 (1/26) (8/8) 1969 - High Low 8.85 6.90 (12/5) (2/21) 7.84 6.55 (2/26) (1/12) 6.97 5.96 (12/26) (1/24) 6.90 4.82 (12/18) (1/28) 1970 - High Low 9.30 7.68 (6/19) (12/18) 8.60 7.48 (7/3) (12/31) 7.55 6.17 (5/29) (12/18) 7.12 5.33 (5/29) (12/11) 1971 - Jan. Feb. 1 8 15 22 29 5 7.59 7.31 6.98 6.76 6.91 7.48 7.45 7.42 7.36 7.19 7.10 5.58 5.74 5.39 5.13 5.16 5.27 6.44 6.36 6.21 6.09? 6.05 6.09 1 New corporate issues, with call protection, adjusted (as described in footnote 1 of Table 1) to a Aaa basis. 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, 2 \ 6 TABLE 4: Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) GROSS PROCEEDS CORPORATE STATE AND LOCAL 2 1969 1971 2,636 1,802 3,539 2,075 2,045 2,098 i 2,600e j ! April Hay June 3,170 3,909 3,389 2,748 2,076 2,530 July August September 2,768 2,274 3,518 2,478 1,427 2,427 October November December 3,851 4,050e 3,700e January February March Z 1 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 1st half Three quarters Year 1971 1970 2,100e 7,977 10,468 8,560 11,601 18,445 27,005 38,606e 1970 1969 1,340 1,214 1,551 1,262 987 538 1,647 995 1,088 1,801 1,110 737 1,338 1,355 1,728 1,097 808 559 1,933 2,375 2,532 1,860 1,742 2,214e 1,280 886 816 6,218 7,354 6,332 6,840 4,105 3,730 4,421 5,816 2,787 3,648 2,464 2,982 13,572 19,904 - 26,744 j | 1 1 7,835 12,256 18,072e 6,435 8,899 11,881 Excluding finance companies ^ 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 6,170 7,037 Year Securities and Exchange Commission 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) QUARTER OR MONTH 1970 - I II III IVe 1970 - Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. e/ Dec. e/ TOTAL GROSS PROCEEDS BY TYPE OF ISSUER PUBLIC UTILITY COMMUNICATIONS ISSUERS 1 7,977 10,468 8,560 LI, 601 4,577 6,994 5,987 7,640 1,235 1,282 914 1,385 2,147 2,190 1,659 2,576 222 135 83 922 710 287 786 2,584 2,445 2,314 2,869 2,085 2,812 2,714 2,996 766 2,162 868 1,320 2,543 3,048 2,663 4,417 2,636 1,595 1,068 1,914 516 525 468 1,154 701 468 1,021 617 338 704 1,076 61 33 128 aa_ 387 249 286 639 540 906 1,109 200 200 811 357 1,416 689 817 939 638 682 994 1,094 1,025 750 1,103 843 630 1,241 1,101 970 925 234 226 306 62 1,747 353 144 279 445 370 675 275 952 680 911 1,310 744 994 1,143 682 838 1,287 1,380 1,750 80 505 465 380 1,400 1,802 3,539 3,170 3,909 3,389 2,768 2,274 3,518 3,851 4,050 3,700 Jan. e/ 2,750 1 PUBLICLY OFFERED GROSS PROCEEDS BY TYPE OF ISSUE COMMON MEMO: AND PRIVATELY PFD. ISSUES INCLUDED MFG. PLACED STOCK FOREIGN CONVERTIBLE 266 3,041 1,931 1,831 1,731 2,425 2,390 2,950 2,300 471 447 399 436 320 205 389 385 300 700 2,000 300 2,022 800 700 450 20 26 68 11 4 4 n.a. n.a. 230 82 107 59 121 386 600 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. \ TABLE 6: Large Long-term Public Security Issues for New Capital (Other than U.S. T r e a s u r y ) 1 1 SSl'KR TYPE v AMOUNT (MILLIONS OF DOLLARS) Corporates Texas Pwr. & Lt. Co. Pub. Serv. Co. of Colo. Unlroyal Inc. Pacific Pwr. & Lt. Co. Niagara Mohawk Pwr. Co. Penna. Pwr. & Lt. Co. 30.0 1st. Mtg. 1st. Mtg. bds 40.0 100.0 Debs. 40.0 1st. Mtg. 65.0 1st. Mtg. 60.0 Debs. MATURITY I • 2001 2001 1996 2001 2001 2001 anii'ON RATE OR WET W K R EBT COST 7.13 7.25 5.50 7.88 7.38 7.25 February 1 thru February 5, 1971 OKFKRINC'i Y.l 1:1,1) 6.95 7.17 5.50 7.90 7.25 7.15 MOOhY1^ RATING Aaa Aa Ba Baa A Aa TABLE 6: Large Long-term Public Security Issues for New Capital (continued) ° (Other than U.S. Treasury) 1 V ISSUER AMOUNT (MILLIONS OF DOLLARS) TYPE2 MATURITY COUPON RATE OR NET INTEREST COST February 1 thru February 5, 1971 MOODY'S RATING OFFERING YIELD State and Local * 1 2 3 100.0 15.0 18.0 18.0 16.3 14.4 21.3 11.0 Bds. G.O. Rev. G.O. G.O. G.O. G.O. G.O. California Prince William Co, Va. LOB Angeles DWAP Anne Arundel Co., Md. Yonkers,N. Y. Hartford, Conn. Alaska Peabody, Mass. 1980-20 1972-1990 1977-96 1972-2001 1971-88 1972-2009 1972-1992 1990-91 5.52 4.69 5.47 4.93 3.90-5.70 2.75-5.00 3.60-5.30 2.80-5.50 2.70-5.00 2.60-5.30 3.00-5.80 2.80-5.20 — 4.77 5.07 — Aa A Aa A A Aaa Baa Aa Rights offering. .Includes corporate and other security offerings of $15 million and over; State and local security offerings of $10 million and over. In case of State and local government securities* G.O. denotes general obligation; Rev.-Ut., revenue obligations secured only by income from public utilities; Rev.TQ.-Ut., revenue bonds secured only by income from quasi-utilities; Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent., revenue bonds secured solely by lease payments. Includes" foreign government and International Bank for Reconstruction and Development issues and non-quaranteed issues by Federal Agencies. • ': • ' \/' - ; " ' '• ••••- . •' • •' •' 1 10 - . ' TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury) 1 . • > , (continued) As o f February 5 , 1 9 7 1 1 ISSUER TYPE Corporates Debs. Reliance Elec. Co. Debs. American Tel. & Tel. Co. 1st. Mtg. Central Pwr. & Lt. Co. Bds. Indiana & Michigan Debs. M . Lowenstein Inc. 1st. Mtg. Georgia Pwr. Co. Debs. Wisconsin Tel. Co. Bds. Houston Lighting & Pwr. Co. Debs. *Dana Corp. Jersey Central Pwr. & Lt. Co. Bds. U. S. Plywood-Champion Paper S. F. debs. Inc. Bds. Northern States Pwr. Co. Debs. Texas Eastern Trans Corp. South Carolina Elec. & Gas Cc Bds. 1st. Mtg. Gen'1 Tel. Co. Florida Debs. Hart Schaffner & Marx McCulloh Properties Credit Debs. Corp. Notes Microdot Inc. Bds. Beneficial Corp. Bds. Beneficial Corp. Con debs. Occidental Petroleum Corp. Notes Monumental Corp. 1st. Mtg. Alabama Gas Co. Maine Yankee Atomic Pwr. Co. Bds. S. F. debs. * Harsco Corp. Debs. Columbia Gas System Inc. 1st. Mtg. Duquense Lt. Co. Debs. ^Pacific Tel. & Tel. Co. Bds. Rochester Tel. Co. Debs. Swift & Co. 1st. Mtg. Burlington Northern, Inc. Conv. debs. Georgia-Pacific Corp. 1st. Mtg. Ohio Power Company *North American Rockwell Corp. S. F. debs. *Central Tel. & Utility Corp. 1st. Mtg. Debs. New England Tel. & Tel. Co. AMOUNT (MILLIONS OF DOLLARS) APPROXIMATE DATE OF OFFERING 30.0 500.0 36.0 30.0 50.0 49.5 90.0 49.5 50.0 35.0 February February February February February February February February February February 8 8 9 10 15 16 16 16 17 18 100.0 50.0 50.0 35.0 45.0 35.0 February February February February February February 18 23 23 24 25 25 30.0 20.0 50.0 25.0 100.0 20.0 16.0 50.0 30.0 75.0 35.0 200.0 30.0 50.0 60.0 125.0 40.0 100.0 20.0 200.0 February February February February February February February March March March March March March March March March March March March May 2 4 4 8 9 11 22 25 11 TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury)' As of February 5 , ISSUER TYPE AMOUNT (MILLIONS OF DOLLARS) " 1971 APPROXIMATE DATE OF OFFERING State and Local Detroit, Michigan Tennessee Vermont, State of New York, State of Dallas-Ft. Worth Airport, Tex. San Antonio, Tex. Los Angeles, Co. Fid. Ctr. Dist. California *Prince Georges Co., Md. Newark, N . J . St. Louis, Missouri Calif. State Colleges Louisiana, State of Pittsburg Stadium Auth., Pa. Virginia Pub. Sch. Auth. Los Angeles Harbor Dept., Cal. Texas Wtr. Development Bd. New York State House Finance Agency Ohio, State of San Bernardino, Calif. Redevp. Agency Roanoke, Va. Broward Co. S/D, Fla. Dallas, City of San Antonio, Tex. Buffalo, N. Y. Baltimore, Md. * 1 2 Rev. G.O. G.O. Bds. Rev. Rev. 20.0 66.0 25.0 96.0 65.0 10.0 Feb. Feb. Feb. Feb. Feb. Feb. 9 9 10 10 10 11 Bds. Bds. G.O. G.O. Bds. G.O. Bds. G.O. G.O. G.O. 24.0 26.2 18.8 10.0 13.7 50.0 35.0 25.0 16.0 25.0 Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. 16 17 17 17 17 18 18 18 24 24 G.O. 103.8 75.0 Feb. Feb. 24 25 Bds. G.O. G.O. G.O. G.O. G.O. G.O. 13.5 10.0 18.6 27.0 13.0 22.1 35.2 Feb. Mar. Mar. Mar. Mar. Mar. Mar. 2 3 3 4 9 16 Included in table for first time. Includes corporate and other issues of $15 million and over; State and local Government issues of $10 million and over. Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues of Federal Agencies. TABLE 8: Stock Prices and Volume TRADING STOCK PRICES 1 DATE NYSE 3 INDEX 61.27(11/29 48.66(3/5) 1968 - High Low D.J. - IND. AMEX 4 NYSE AMEX i f 985.21(12/13) 825.13 (3/21) 33.24(12/20) 21.97(3/25) 17.1(7/12) 8.3(3/29) 9.3(1/19) 2.9(3/29) 16.5(3/29) 8.6(8/29) 8.0(1/31? 3.6(11/2 ]) 1969 - High , Low 50.32(5/14) 49.31(7/29) 968.85(5/14) 769.93(12/17) 32.91(1/3) 25.02(7/29) 1970 - High Low 52.36(1/5) $7.69(5/26) 842.00(12/29) 631.16(5/26) 27.02(1/8) 19.36(5/27) 18.5(22/4) 7.8(8/14) 7.1(1/2) 1.8(8/14) 1971 - Jan. Feb. i | 12 1 8 15 22 29 50.23 50.46 51.16 52.11 52.64 838.92 837.01 845.70 861.31 868.50 22.75 23.10 23.52 23.93 24.32 15.6 14.0 17.4 18.1 20.2 4.4 3.6 4.3 4.7 5.3 ? } 5 53.36 876.57 24.67 21.1 6.9 ; 1. Figures other than highs and lows are Fridays only, for the year and are not necessarily for Fridays. 2. NYSE is the New York Stock Exchange; AMEX is the American Stock Exchange. Volume figures are daily averaged for the entire week, (millions of shares). Trading is normally conducted for 5-1/2 hours per day""aiid 5 days per week, or 27-1/2 hours per week. In recent years, however abbreviated trading to the extent, and over the time periods, shown below; Hours/ Days/ Hours/ Through: Day From Week Week August 8, 1967 August 20, 1967 20 5 4 20 5 January 22, 1968 March 1, 1968 4 22 December 31, 1968 5-1/2 June 30, 1968 4 20 July 3, 1969 5 January 3, 1969 4 22-1/2 December 31, 1969 . 4-1/2 5 July 7, 1969 January 2, 1970 May 1, 1970 5 25 5 3. 12/31/65= 50 4. Average dollar value of shares listed. Highs and lows are T 13 TABLE 9: Security Credit END OF PERIOE CREDIT EXTENDED TO MARGIN CUSTOMERS BY: BROKERS 1 | BANKS 2 | TOTAL CUSTOMERS' NET DEBIT BALANCES NET CREDIT CUSTOMERS' NET EXTENDED BY BROKERS AND FREE CREDIT DEALERS 3 BALANCES Outstanding: 1969 - Dec. 4,970 2,580 7,550 7,445 2,803 1970 - Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 4,680 4,570 4,520 4,360 4,160 4,150 3,800 3,810 3,920 4,010 4,010 4,030 2,430 2,370 2,370 2,330 2,290 2,290 2,290 2,300 2,330 2,270 2,320 2,330 7,110 6,940 6,890 6,690 6,450 6,150 6,090 6,110 6,250 6,280 6,330 6,360 6,683 6,562 6,353 5,985 5,433 5,281 (4) (4) (4) (4) (4) (4) 2,626 2,563 2,441 2,248 2,222 2,009 (5)2,180 2,083 2,236 2,163 2,197 2,286 - 4,642 4,057 4,099 3,9X2 3,724 3,211 3,272 (4) (4) (4) (4) (4) (4) Change in Outstanding: 1969 - Dec. -100 60 -40 334 190 144 1970 - Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. -290 -110 - 50 -160 200 - 10 -350 - 10 110 90 2 18 -150 - 40 -440 -170 - 50 -200 240 -300 -60 - 20 140 30 52 28 -762 -121 -209 -368 -552 -152 -177 -163 - 22 -193 - 26 -213 171 97 153 - 73 34 89 -585 42 -187 -188 -513 -61 WW —— - 40 - 40 —— —— 10 30 - 60 50 10 — — — —— — —" •*" -- 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 or carrying securities other than U.S. governments." The difference between customers' net debit balances and customers' net free 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. ''1 J TABLE 10: Savings Flows at Nonbank Depositary Intermediaries 1 ($ millions) DATE MUTUAL SAVINGS BANKS REGULAR DEPOSITS 3 NET ANNUAL NEW GROWTH MONEY 2 NET 1 FLOW RATE SAVINGS & LOAN ASSOCIATIONS NET SHARE CAPITAL NEW ANNUAL MONEY2 NET GROWTH 1 FLOW RATE ' TOTAL DEPOSITS | NET NEW ANNUAL ' NET GROWTH MONEY 2 1 RATE FLOW Not Seasonally Ad justed 1968 1969 1970 b/ 4,203 2,549 4,199 1969- Oct. Nov. Dec. -138 257 571 1970 - Oct. Nov. Dec 2./ 276 497 900 1970 - July Aug. Sept. Oct. Nov. Dec. E./ 497 268 437 444 531 557 1 2 3 7.0 4.0 6.3 -s mm — —- 8.8 > 4.7 7.6 7.7 9.1 9.5 1,143 -763 860 7,432 4,019 11,048 266 179 -237 -406 226 1,069 138 388 300 1,130 1,098 2,696 —— —-- 6.0 3.1 8.2 • — -— 6.3 3.4 7.5 2,738 -1,003 5,288 11,635 6,568 15,247 -430 207 -387 -544 483 1,640 1,064 1,044 1,154 1,406 1,595 3,596 —— 2,273 1,053 1,830 1,843 1,623 2,278 13.3 6.1 10.5 10.5 9.2 12.8 Seasonally Adjusted 15.5 1,776 6.8 785 1,393 11.9 1,399 11.9 9.2 1,092 14.3 1,721 --- -— — -- —— a -- — 3,881 -1,766 6,148 -696 386 -624 1,202 1,432 1,454 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. 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. ---- -- T A B L E 11: Mortgage Commitments at Selected Thrift Institutions DATE - Dec. - Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. l TOTAL 8.4 8.2 7.9 7.6 7.8 8.0 8.2 8.6 r8.8 9.1 9.3 9.4 9.8 1 OUTSTANDING COMMITMENTS | NET CHANGE ALL ALL MUTUAL 1 SAVINGS SAVINGS & TOTAL SAVINGS & BANKS LOAN ^ LOAN (N.Y. STATE) ASSOCIATIONS ASSOCIATIONS (Billions of Dollars, S< lasonally Adjusted) 1/ 5.8 2.6 5.6 5.4 5.2 5.4 5.8 6.1 6.5 6.8 r7.1 7.4 7.5 7.6 2.6 2.5 2.5 2.4 2.2 2.1 2.0 2.0 1.9 1.9 1.9 1.9 \ MUTUAL SAVINGS BANKS (N.Y. STATE) 1 -.25 -.12 -.13 -.17 -.30 -.26 .13 .24 .22 .38 .24 .24 .32 .34 .55 -.22 -.23 -.21 .26 .38 .30 .42 .33 .39 .39 .33 .32 .04 -.07 -.05 • -.13 \\ -'14 -.09 r-.04 r-.08 -.10 -.06 -.07 -.22 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 m i n o r 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. . 16 TABLE 12: Net Change in Mortgage Holdings DATE TOTAL INCLUDING FNMA-GNMA TOTAL 1 FINANCIAL INSTITUTIONS MUTUAL SAVINGS & SAVINGS COMMERCIAL LOAN BANKS BANKS ASSOC. LIFE INSURANCE COMPANIES FNMA-GNMA Not Seasonally Adjusted 18,105 20,016 23,781 24,051 15,782 18,219 21,273 19,676 4,705 4,639 6,677 5,535 2,720 3,153 2,787 2,682 3,761 7,520 9,350 9,407 4,596 2,907 2,459 2,052 2,323 1,797 2,508 4,375 1969 - Nov. Dec. 1,636 2,120 1,042 1,475 300 200 151 325 450 533 141 417 594 645 1970 - Nov. Dec. 2,184 n.a. 1,932 n.a. 300 200 183 n.a. 1,322 1,664 1,913 1,315 314 279 1,469 1,542 1,330 1,351 1,485 1,749 2,083 1,817 2,091 2,074 2,186 n.a. 919 1,044 809 844 1,050 1,281 1,575 1,409 1,727 1,754 1,958 n.a. 231 199 140 76 65 81 165 168 228 195 224 312 25 143 186 188 155 201 142 175 245 170 176 n.a. 1966 1967 1968 1969 127 n.a. 252 n.a. Seasonally Adjusted - Dec. - Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 571 452 482 322 385 631 777 1,055 983 1,103 1,189 1,427 1,702 151 598 211 220 161 195 199 222 213 83 151 200 131 n.a. 550 498 521 507 435 468 508 408 364 320 228 n.a. - Monthly data for commercial banks based on Federal Reserve estimates benchmarked to Call Report data on real estate loans outstanding as available. Other data derived from mortgage debt outstanding as reported separately by National Assn. of Mutual Savings Banks, Federal Home Loan Bank Board, Institute of Life Insurance and, through August 1968, the Federal National Mortgage Association, and thereafter by FNMA and the Government National Mortgage Association. Data for mutual savings banks and for Life Insurance companies may differ somewhat from those derived from regular quarterly series because of minor conceptual differences for which adjustments are not made in the monthly series. Altogether, these groups accounted for 86 per cent of the net increase estimated for all holders in 1967. 17 TABLE 13: Net Increases in Mortgage Debt Outstanding Billions of dollars, SAAR QUARTER TOTAL RESIDENTIAL 3 1- to 4FAMILY MULTIFAMILY 5.5 4.1 8.2 6.0 2.2 1.8 MULTI-AND COMMERCIAL COMMERCIAL FARM 1966 - II IV 18.6 15.1 10.9 9.1 8.3 7.0 2.6 2.1 1967 - I 15.9 20.7 26.6 27.3 10.3 13.9 19.2 19.8 7.0 10.5 15.3 16.0 3.3 3.4 3.9 3.8 3.9 5.0 4.9 4.8 7.3 8.4 8.8 8.4 1.8 1.8 2.5 2.8 1968 - I p I* IIIp IVp 27.7 26.2 26.0 29.6 19.0 18.2 17.7 20.2 15.8 15.0 14.1 16.4 3.1 3.2 3.4 3.8 6.4 5.9 6.5 7.5 9.4 9.2 10.2 11.1 2.3 2.2 1.8 1.8 1969 - I p H p IIIp IV p 31.3 28.9 26.5 30.4 29.0 21.5 19.3 18.3 18.6 16.8 14.6 13.0 4.4 4.7 4.7 5.3 6.2 5.2 5.3 5.4 10.4 10.1 10.0 10.7 2.2 2.2 1.8 1.4 1970 - I p H> IIIp IVp 20.3 23.4 26.9 13.8 16.9 20.9 8.8 11.5 15.0 5.0 5.4 6.0 5.0 5.0 4.2 9.8 9.8 10.1 1.5 1.5 1.7 It III IV I 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 Agri- , farm mortgage debt by type of property, where not available, and i n t e r p o l a t i o n and extrapolations, where required, estimated mainly by Federal Reserve. • maini ^ 3 Residential mortgage debt includes nonfarm only and is sum of 1-to 4- family and multifamily mortgage debt combined. TABLE 14: FNMA Weekly " A u c t i o n " Results WEEK I ENDED COMMITMENTS IN $ MILLIONS ACCEPTED 1-YEARN TOTAL 90TOTAL 6OFFERED MON/TH & OVER DAY IMPLICIT YIELD 2 (per cent) 90DAY 6MONTH 1-YEAR & OVER Aug. 10 24 441.3 575.0 180.2 215.1 41.4 48.8 91.0 124.4 47.8 41.9 9.03 9.03 9.03 9.03 9.04 9.03 Sept. 8 21 384.2 207.8 200.1 195.3 45.6 117.0 40.1. 121.5 37.5 33.7 9.06 9.01 9.04 9.01 9.04 9.02 Oct. 5 19 267.5 352.5 149.8 149.7 y 62. 21 53.2: 73.1 88.1 14.5 8.4 8.90 8.89 8.92 8.90 8.97 8.95 Nov. 2 16 341.5 222.4 181.2 170.3 100.1 75.8 62.4 79.4 18.7 15.1 8.90 8.89 8.93 8.90 8.93 8.92 Dec. 7 14 28 166.5 165.5 60.6 127.8 124.7 48.1 54.7 42.1 17.2 60.9 72.1 28.9 12.2 10.5 3.0 8.56 8.51 8.41 8.54 8.43 8.36 8.57 8.47 8.40 Jan. 25 44.6 35.5 9. 9 25.6 7.63 7.96 -- 1 Note: Under the FNMA auction system, approved sellers of Governmentunderwritten 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. 2 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 38 basis points fee paid by investors to servicers. Prior to August 10, 1970 the servicing fee was 50 basis points. 19 TABLE 15: Private Housing Starts and Permits STARTS SEASONALLY .ADJUSTED ANNUAL RATE TOTAL 1-FAMILY 2 OR MORE TOTAL UNADJUSTED TYPE OF FINANCING FHA I VA OTHER BUILDING PERMITS (SEASONALLY ADJUSTED ANNUAL RATE) 2 ,1969 - Dec. 1,402 776 626 84.1 23.2 4.2 57.9 1,239 "970 - Jan. 577 1,059 725 1,306 1.392 708 1,224 697 1,242 728 835 1.393 827 1,603 838 1,425 881 1,509 1,583 890. 930 1,688 1,987 1,204 482 581 684 527 514 558 776 587 627 693 758 783 66.4 74.3 114.7 128.4 125.0 135.2 140.8 128.7 130.9 140.9 126.9 117.6 16.5 17.5 3.4 3.9 4.8 5.4 5.2 5.1 5.3 5.6 5.3 5.8 5.5 5.7 46.5 52.9 84.7 90.6 1,013 1,137 1,099 1,263 1,321 1,306 1,275 1,326 1,371 1,521 1,489 1,737 J1 1 I | ! Feb. Mar. Apr. May June July Aug. : Sept.: Oct. i Nov. X Dec.p 1 25.2 32.4 37.1 40.7 43.4 34.1 34.3 40.4 33.7 63.2 80.8 89.4 92.1 87.7 91.3 94,7 87.2 48.7 Total starts are Census estimates including farm for both permit-issuing and non-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 per mits reflect direct adjustment for differences in the number of working days per month, as well as other differences in timing and coverage. 20 TABLE 16: Mortgage and Bond Yields FHA | MORTGAGES , DATE 25-YEAR 30-YEAR i CONVENTIONAL MORTGAGES 3 SPREAD BETWEEN YIELDS ON C0NV. & FHA MORTGAGES 1 NEW Aaa CORPORATE BONDS 4 SPREAD BETWEEN YIELDS ON NEW CORPORATE BONDS AND FHA MORTGAGES 1959-60 - High 1961-66 - Low 1966 - High 1967 - High - Low 1968 - High Low 1969 High Low 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 8.62 7.99 6.30 5.80 6.70 6.70 6.40 7.40 6.75 8.35 7.55 .23 .25 .30 .11 -.12 .12 -.27 .40 .13 5.25 4.41 5.82 6.51 5.18 6.79 6.15 8.75 6.91 1.69 .77 1.16 1.28 .27 1.20 .26 1.08 -.13 1970 - Aug. Sept. Oct. Nov. Dec. n.a. n. a. n. a. n.a. n.a. 9.07 9.01 8.97 8.90 8.40 8.60 8.50 8.50 8.45 8.30 -.47 -.51 -.47 -.45 -.10 8.48 8.42 8.63 8.34 7.80 .59 .59 .34 .56 .60 1 2 3 4 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 a n d — b e g i n n i n g 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. 21 TABLE 17: Conventional Mortgage Terms NEW HOMES CON- FEES & TRACT CHARGES EFFEC- MATURITY (PER (YEARS) RATE TIVE (PER CENT) RATE CENT) 3 2 1.06 8.25 8.16 1.08 8.23 8.29 8.23 1.09 8.34 8.41 8.47 8.40 8.45 8.48 8.49 8.52 8.48 8.51 8.43 8.37 8.07 8.28 8.31 8.32 8.358.31 8.33 8.26 8.20 1. 1.11 1.02 0.98 0.99 1.01 0.98 1.03 1.05 0.99 1.07 25.4 25.0 24.2 25.0 24.8 25.3 25.1 25.1 24.8 25.2 25.1 25.3 25.9 LOAN/ PRICE RATIO (PER CENT) LOAN AMT. ($000) 4 1 EXISTING HOMES CON- PEES & LOAN/ TRACT CHARGES EFFEC- MATU- PRICE (PER RATE TIVE RITY RATIO CENT) RATE (YEARS) (PER (PER CENT) CENT) 2 3 ($000 4 71.9 25.0 8.08 0.93 8.24 22.9 70.6 20.8 69.3 25.1 24.9 25.1 24.5 25.3 25.6 24.9 25.5 25.3 24.8 25.2 25.7 8.13 8.23 0.94 22.4 22.4 8.26 8.20 8.18 70.3 70.2 70.4 70.4 70.3 71.5 71.5 71.7 71.7 71.5 71.5 71.9 20.5 20.4 0.98 0.90 0.94 0.98 0.95 0.89 8.29 8.41 8.43 8.35 8.34 8.36 8.37 8.41 8.42 8.35 8.32 J 1.8 71.1 71.1 71.7 71.3 71.5 71.6 72.7 72.4 72.1 74.0 8.19 8.21 8.25 8.27 8.20 8.18 8.12 1.02 0.88 0.88 0.85 0.84 8.26 22.6 22.8 22.8 23.0 23.1 23.1 22.8 22.8 22.8 23.3 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 on unweighted opinions of field-office directors of the Federal Housing Administration, are available somewhat sooner than the results of the FHLBB-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. 4 Derived by FRB. LOAN AMT. 20.6 20.4 21.1 21.5 21.7 21.4 21.0 20.5 21.1 21.8