Full text of H.16 Capital Market Developments : May 14, 1973
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e m m i DECONTROLLED' AFTER S I X MONTHS " L.5.8 Confidential (F.Rii CAPITAL MARKET DEVELOPMENTS Capital Markets Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D. C. May 1 ^ , 1 9 7 3 INDEX Developments in the Corporate and Municipal Bond Markets C a p i t a l Market Y i e l d s C a p i t a l Market Volume Stock Market Mortgage Market SYMBOLS: e Estimate p Preliminary r Revised n o. Not a v a i l a b l e 3 TABLE 1: Yields, Volume and Reception MOODY'S SEASONED Aaa WEEK ENDING: 6 13 20 27 1973 - Apr. May 4 11 18 7.51 7.45 7.40 WEEK ENDING: NEW a ISSUE 1973 - Apr. May CORPORATE BOND MARKET VOLUME^ PER CENT -GROSS SOLD BY END BONDS SCHEDfLED OFFERINGS OF WEEK WITHIN 28 DAYS 7.27 7.25 7.25 7.27 139 83 . 70 492 7.26 7.26 205 39 155e BOND BUYER SEASONED 20 BOND INDEX 90 100 100 98 „ 97 . MUNICIPAL BOND MARKET VOLUME 2 PER CENT !" GROSS SOLD BY END i BONDS SCHEDULED OF, WEEK I WITHIN 28 DAYS OFFERINGS 6 13 20 27 5.05 4.85 4.90 5.00 5.22 5.07 5.17 5.14 . 304 . 657 286 286 4 11 18 4.85 4.85 5.10 5.10 n.a. 354e 334 462 90 ' 93 67 77 64 701 519 433 618 602 1,018 . New series derived by adjusting to a Aaa utility basis, new issues of publicly-offered corporate bonds with call protection, rated A, Aa, or Aaa bond 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: Sec footnotes to Table 3 •p- T A B L E 2: Details on Inventories DAT Li: OFFERED CORPORATE BONDS IN SYNDICATE END OF LATEST WEEK ORIGINAL RATING ANb YIELD CALL PROTECTION COUPON ISSUER AMOUNT ' (MIL. S) ESTIMATED PROPORTION SOLD NONE \ OFFERED 4/26 5/1 5/2 DATE 1 R'ELEXSED 5/7 5/7 5/9 DATE 1973 - April May CORPORATE BONDS RELEASED FROM SYNDICATE DURING LATEST ORIGINAL COUPON ISSUER YIELD 7.13 Ford Motor Credit 7.25 Gulf Power 7.50 7.48 Hartford Elect 7.50 7.45 AMOUNT 75.0 15.0 40.0 13 20 27 4 11 INVENTORIES 1 MUNICIPALS BLUE LIST | IN SYNDICATE 618 ' 56 701 105 661 76 633r 608 72 162 WEEK INCREASE RATING AND ESTIMATED PROIN YIELD CALL PROT. PORTION RELEASED +23 5 yrs 25% +4 Aa 5 yrs 25% +5 Aa 5 yrs 20% CORPORATES IN SYNDICATE 0 0 45 61 0 N.C. - No call protection. j l All figures in millions of dollars. Blue List is daily average for week ended Friday,except for latest \.cek which i< daily average of three days endt-d Wednesday. All other figures arc as of Friday. T A B L E 3: High Grade Bond Yields MOODY'S SEASONED CORPORATE Aaa 2 7.71 (8/12) 7=06 (2/12) U.S. GOVERNMENT 20-YEAR CONSTANT MATURITIES 3 6.51 (6/18) 5.69 (3/23) BOND BUYER'S SEASONED MUNICIPALS 4 6.23 (6/23) 4.97 (10/21) 1971 - High Low NEW CORPORATE Aaa 1 8.26 (7/30) 7.02 (2/5) 1972 - High Low 7.60 (4/21) 6.99 (11/24) 7.36 (4/28) 7.05 (12/8) 6.19 (4/14) 5.74 (11/1-7) 5.54 (4.13) 4.96 (10/21) 1973 - High Low 7.52 (3/16) 7.29 (1/21) 7.31 (3/30) 7.11 (1.5) 6.91 (5/11) 6.42 (1/5) 5.35 (3/22) 5.03 (1/12) 7.51 7.27 7.25 7.25 7.27 6.87 6.84 6.84 6.88 5.22 5.07 5.17 5.14 DATE 1973 Apr. 6 13 20 27 —— -- 7.45 7.40 7.26 6.94 5.10 4. 5.10 7.26 6.98 . 11 1 New, issue, Aaa utility, with call protection, adjusted (as described in 1 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 1 s Investors Service. Note--Highs and lows are for individual series and may be on different dates for different series. . May 6 TABLE 4: Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) GROSS PROCEEDS CORPORATE 1 STATE AND LOCAL ' 1972 1971 2,384 1,894 4,050e 3,205 3,369 3,229 3,115 3,000 6,075 2,250e 3,275 3,598 4,341 August September October November December January February XarcH April May | I July 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 1st half Three quarters Year ,328e 1973 1972 1971 1,776 2,005 2,239 2,732 1,851 2,258 4,042 3,300 - 4,375 l,525e 1,989 2,017 2,270 1,891 2,167 2,013 3,582 2,893 2,720 4,147 2,532 3,768 1,805 1,966 1,726 1.989 1,903 2,098 3,791 3,377 3,396 3,387 3,704 3,673 2,200 1,861 1,794 1,728 2,264 2,068 9,803 11,214 9,195 10,564 12,190 11,688 10,447 10,764 6,020 6,276 5,494 5,855 6,841 6,081 5.990 6,060 21,017 30,212 40,776 23,844 34,325 45,089 12,296 17,790 23,645 12,812 18,902 24,962 1,978 1,481 2,353 5,812 Securities and Exchange Commission estimates of gross proceeds. Investment Bankers Association of America estimates of principal amounts. T A B L E 5: New Corporate Security Issues, Type of Issue and Issuer (In millions of dollars) CHARTER OR MONTH TOTAL 1972 - II III IV 11,214 9,195 10,564 GROSS PROCEEDS BY TYPE OF ISSUE COMMON AND BONDS MEMO: PUBLICLY 7 PRIVATELY PFD. ISSUES INCLUDED MFG. STOCK FOREIGN | CONVERTIBLE OFFERED 1 PLACED 4, 634 4, 192 4, 158 2,781 1,867 3,147 3, 798 3, 136 3, 258 245 57 245 449 836 428 CROSS PROCEEDS BY TYPE OF ISSUER PUBLIC UTILITY COMMUNICATIONS OTHER ISSUERS1 2,,109 1,,629 1.,398 3,495 2,680 2,934 1,,369 856 1,,079 4,240 4,030 5,151 1973 - I 8,328 2 730 1,626 3 971 n. a. 113 612 2,443 1.,158 4,115 1972 - Jan. Feb. Mar. 3,205 3,369 3,229 1, 767 1, 907 1,,677 604 412 577 834 1,041 976 59 12 3 195 83 233 392 529 604 533 988 740 752 498 227 1,529 1,354 1,658 Apr. May June 3,275 3,598 4,341 1,,622 1,,676 1,,336 789 744 1,218 864 1,,148 1,,786 15 100 130 92 226 131 581 761 767 1,219 738 1,538 178 391 800 1,297 1,708 1,235 July Aug. Sept. 3,582 2,893 2,720 1,,807 1,,523 863 657 421 789 1,,118 948 1,,070 3 17 37 450 183 203 574 452 603 798 635 1,247 586 237 33 1,624 1,568 838 Oct. Nov. Dec. 3,791 3,377 3,396 1,,773 1,,361 = 1 ,024 564 982 1,601 1,,454 1,,034 770 28 124 93 162 171 95 383 426 589 1,280 794 860 371 658 50 1,757 1,499 1,895 33 140 985 200 1,280 955 1,880 1^150 989 1 ,050 2,384 344 14 81 173 1973 - Jan. 641 282 971 1,894 204 Feb. . 27 27 1 1,000 1 ,100 Mar. e( 4,050 n. a. 1 ,950 | 5 235 2,250 800 Apr .5( 650 800 1 n. a. | 0 225 extractive , railroad and other transportation, real estate i Otiu r issuers are < and finance, and commercial and other. Source: Securities and Exchange Commission.. Quarterly supplements are avail- 897 596 950 .425., / TABLE 6: Large Long term Public Security Issues for New Capital (contimii d) (Other than U.S. Treasury) 1 ! ISSUER Gulf Power Toledo Edison Hartford Elect Co. Jones & Laughlin Steel Corp Seaboard Coastline RR Co. Excelsior Income Shares, Inc. Great American Mortgage Invest. Alison Mtge Investors Pennzoil Co. Baltimore Gas & Elec CNA Income Shares Dayton Power & Light Federal Home Loan Mtge Corp TYPE 2 AMOUNT (MILLIONS OF DOLLARS) 25.0 22.3 40.0 40.0 75.0 55.0 25.0 25.0 Debs Pref s tk 65.0 49.4 Com stk 69.0 Com stk Pref s tk 25.0 mtge backed bond s 400.0 Bonds Com stk Bonds 1st mtge 1st mtge Com stk MATURITY 2003 -- 2003 1998 1998 , -" Mav 1. 19 .72 through May 1;i COUPON 1 RATE OR OFFER - MOODY ? RATING NET INTERIM: EST COST | YIELD 7 1/2 —— 7 1/2 8.00 7 3/4 -- 7.48 -- 7.45 8.07 7.78 8.75 8.75 8.00 7.38 7.38 1976 . 7.05 7.05 1976 7.05 7.05 — — — -- Other Federal Home Loan Mtge Corp. Mtge backed bonds 400.0 -- Aa Baa A -- 8 3/4 8.75 8.00 1983 1983 Aa -- TABLE B: Lartje LOIUI term Public Security Issues for New Capital (continued) (Otliei than U.S. Treasury) 1 ISSULK California New Jersey Turnpike Authority Pinellas Co., Fla Detroit, Mich. Massachusetts Hawaii, State of Clacasieu Parish Ind. Dev. Bd., La. Pol. Clacasieu Parish Ind. Dev. Bd., La. Pol. Tucson Ariz. Tucson, Ariz. * 1 2 3 TYPE 2 AMUL'NT (MILLIONS OF DOLLARS) G.O. G.O. G.O. 25.0 210.0 13.0 17.5 10.4 75.0 Rev. 2.4 Rev. Rev. G.O. 18.6 2.6 14.1 G.O. Rev. MATURITY 1974-1993 2013 1974-2003 1974-1988 1974-2003 1976-1993 May 1 through Mav 4, 1973 COUPON 1 RATE OR <>ITI:RMOODY'S NET INTERI;.( RATING EST COST VILLI) ! 4 . 64 5 . 76 5 . 30 5 . 31 4. 75 4. 81 4. 00-5.04 4. 10-5.40 4., 0 0 - 5 . 2 5 4., 1 5 - 5 . 0 5 — 4,. 2 5 - 4 . 9 0 1993 -- -- 4..56 5,,15 5.70 4,. 1 0 - 4 . 5 0 I 4 . 0 0 - 5 . 1 0I 1974-1992 3. 9 0 - 4 . 8 5 -- Aaa A A Baa Aa A-l — A A K i ghts o1Ier ing. Includes corporate and other security offerings of $15 million and over; State and 1 oval security offerings of $ 1'0 million and over. In case of State and local government securities,! G.O. denotes general obligation; '<ev.-Ut., revenue obligations secured only by income from public utilities; Rev . -Q. - lit. , revenue bonds secured only by income from quas i-ut i 1 i t i es ; Kev.-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 Reconstruc t i on and Development issues and non-quaranteed issues by Federal Agencies. T A B L E 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury) 1 (continued) ISSUER Beneficial Fin. Mississippi Pwr. Columbus & Southern Ohio Elec Columbia Gas Orange & Rockland General Public Utilities Carolina Pwr & Lt. Con Edison ^Wisconsin Power & Lt. GTE of Kentucky ^Pacific Tele & Tele First Penn Corp Instruments Systems Corp Pacific Tele & Tele Pacific Tele & Tele Potomac Elect Pwr Louisiana Pwr & Lt. Georgia Pwr Fla. Pwr Fla. Pwr. Consolidated Natural Gas. *Consumer Pwr Co. *Illinois Pwr *Gen'l Tele of Wise. — *Duke Pwr. *American Express Income Shares *Circle Income Shares Inc. ^Meridian'Income Sec. *S-G Securities Inc. *Public Service E&G AMOUNT (MILLIONS TYPE OF DOLLARS) Bonds 75.0 Bonds 15.0 Conv debs 25.0 Bonds 50.0 1st mtge 25.0 Com stk (rts) 83.0 Bonds 100.0 Com stk. 120.0 Pref stk 15.0 Bonds 14.0 Com stk (rts) 30.0 Bonds 60.0 Bonds 25.0 Bonds 200.0 Bonds 100.0 Com stk 65.0 Bonds 45.0 Bonds 115.0 Bonds 60.0 Com stk 50:0 v Bonds 50.0 Pref stk 75.0 Bonds 50.0 Bonds 25.0 Bonds 100.0 100.0 Com stk Com stk. 37.5 Com stk. 25.0 Pref stk 60.0 Com stk 108.0 APPROXIMATE DATE OF OFFERING May May May May May May May May May May May May May May May June June June June June June June June June June June June June June June 15 15 16 16 21 22 22 23 23 24 25 29 30 31 31 5 5 6 7 7 11 12 12 14 14 r 11 T A B L E 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury) 1 <c°ntin°ed) ISSUER TYPE State and Local New York State Dormitory Auth Alaska Philadelphia, Pa. Massachusetts Health & Ed. Fac. Auth ? New Orleans, La. *Dallas, Tex *New York St. Urban Dev. Corp *Puerto Rico Industrial Dev. Co. San Jose USD, Cal. , Ohio Pub. Fac. Comm ^Indiana University of Akron, Ohio \ Monroe Co, Mich *Waterbury,,Conn *Penn State Public Sch. Bldg. Auth Austin, Texas Los Angeles Reg Arpts Corp., Cal Prince Georges Co, Md.Poll Cont. Gulf Coast Waste Disposal Auth, Tex. Pensacola, Fla. Lacygne, Kan. Los Angeles, Calif Dept of . Wtr & Pwr. AMOUNT (MILLIONS OF. . DOLLARS) May u > 1973 APPROXIMATE DATE OF OFFERING Rev. G.O. G.O. 11.5 27.0 53.2 May May May 9 15 15 G.O. G.O. G.O. G.O. 10.4 18.0 21.0 200.0 May May May May 16 16 16 16 Rev. G.O. Rev. 35.0 13.0 40.0 May May May 16 16 22 Rev. Rev. G.O. 10.0 51.0 10.0 May May May 22 22 23 G.O. Rev. 18.6 17,. 5 May May 24 31 . Rev. 25.5 Rev. 25.0 May Rev. Rev. Rev. 25.0 12.5 30.0 May May May Rev. 47.0 June 1 May - 6 Included in table frr first time. Includes corporate and ether issues of 515 million and over; State and local Government issues of 510 million and over. Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues of Federal Agencies. 12Table 8 STOCK PRICES AND VOLUME STOCK PRICES1- TRADING VOLUME2' DATE NYSE INDEX 3 - AMEX 65.14(12/11) 1036.27(12/11) 28.53(4/14) 25.61(1/3) 56.23(1/3) 889.30(1/3X 21.8(11/10) 11.2(9.8) 7.4(3/10) 2.6(9/8) 65.48(1/11) 56. 73(4/30) 20.4(1.12) 12.4(4/6), 4.8(1/12) 2.5(5/11) 1972 - High Low 1973 - High Low 950.82(4/28) 26.68(4/28) 797.97(11/23] 222.72(1/4) NYSE 6.7(2/5) 2.7(8/13) 57.76(4/18) 48.73(1/4) May AMEX 4 - 22.1(2/12) 11.0(9/17) 1971 - High Low - 1973 - Apr. D J . INDUSTRIALS 1051.70(1/11) , 26.70(1/8) 921.21(4/30) 23.42(5/1) 6 13 20 27 58.23 59.65 59.59 56.86 931.07 959.36 963.20 922.17 24.06 24.18 24.07 23.57 12.4 15.2 13.2 14.5 2.9 3.1 2.7 3.2 4 11 58.77 57.43 953.87 927.98 23.67 23.53 14.5 13.7 3.0 2.5 NOTES: 1. Figures other than highs and lows are Fridays only. Highs and lows are 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 and 5 days per week, or In recent years, however abbreviated trading to the extent, and over the time Hours/ Days/ From Through: . Day Week January 3, 1969; July 7, 1969 ' January 2, 1970 July 3, 1969 December 31, 1969 May 1, 1970 3. 12/31/65 = 50 4. Average dollar value of shares listed. 4 4-1/2 5 5 5 5 27-1/2 hours per week. periods, shown below: Hours/ Week 20 22-1/2 25 13 TABLE 9: Security Credit END OF PERIOD Outstanding: 1972 - Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. CREDIT EXTENDED TO MARGIN CUSTOMERS BY: BROKERS 1 '[ BANKS ? F TOTAL 1973 - Jan. Outstanding Changes; 1972 - Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1973 - Jan. 5,700 6,180 6,620 7,010 7,200 7,510 7,600 7,780 7,800 7,800 7,890 7,900 2,490 2,510 2,520 2,530 2,560 2,650 2,690 2,780 2,830 2,860 2,860 2,440 8,190 8,690 9,140 9,540 9,760 10,160 10,350 10,560 10,630 10,660 10,750 10,340 7,700 2,910 10,610 300 480 440 390 190 310 150 120 20 50 20 10 10 30 90 50 90 50 30 90 10 % -420 350 500 450 400 220 400 200 210 70 20 90 410 -200 470 270 -- ^ -- :>:ET U RED IT . ! CUSTOMERS' ' CUSTOMERS*' NET 'EXTENDED BY !BROKERS AND | NET DEBIT ! FREE CREDIT | DEALERS 3 BALANCES | i BALANCES 1 (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) 2,488 2,542 2,512 2,459 2,300 2,231 2,245 2,117 2,056 2,097 2,218 2,317 -- 2,296 -— ---- -- --- (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) ; - 268 54 -30 -53 - ' -129 -99 14 -128 -61 41 121 99 ------- --- ---- 21 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 dealer's for purchasing or carrying -...verities other than U.S. governments." The difference between customers' net debit balances and customers' net fivu rvdit 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 bv the New 1'or, Stock Exchange and are end of month data. Bank loans are for Vvvekly n. porting large commercial banks. Broker data includes loans for regulated securities; hank data includes loans for the purpose of purchasing or carrying any security, xvhethrr regulated or not. Series discontinued > T A B L E 10: Savings Flows at Nonbank Depositary Intermediaries ($ millions) MUTUAL SAVINGS BANKS REGULAR DEPOSITS 3 NET NEW ANNUAL MONEY: GROWTH NET 1 FLOW RATE SAVINGS & LOAN ASSOCIATIONS SHARE CAPITAL NET ANNUAL NEW NET GROWTH MONEY' FLOW RATE ' 1969 1970 1971 1972 2 549 4 517 9 ,621 9 ,788 4. 0 6 8 13 5 12 0 N o t Seasonally Adjusted 4,068 3.1 -1,|003 10,965 8.1 5^285 28,230 19.3 20,653 32,902 19.5 23,884 1972 - January February March 855 931 1 ,507 -• 1973 - January February^/ March£/ 766 551 1:,070 1972 - September October November December 925 780 761 902 12,.6 10,.5 10.,2 . 12.,0 1973 - January?/ February®/ March®/ 808 465 550 10 .6 6,.1 7 .0 -763 936 5,67-8 5,397 TOTAL NET FLOW ANNUAL GROWTH RATE ' 6.,617 15,,482 37,,851 42:,690 3. 4 7. 7 17. 5 17. 0 716 809 773 3,266 2,818 4,287 3,117 2,700 2,533 4 :,121 3.,749 5*,794 595 402 n.a. -y 3,278 3,117 -1,905 1,796 n.a. 3,731 Seasonally Adjusted -2,930 17.8 —— 2,706 16.2 —— 2,246 13.3 2,164 12.7 -- 4,,044 2 ,456 4;,801 3,,855 3,,486 3,,007 3,,066 16..2 14,.5 12..3 12,.5 4,026 1,835 2,430 4,,834 2 ,300 j 2,,980 19,.4 9 .1 11,.7 — —— -- __ — --- 23.3 10.4 13.7 -- -• -1,,766 6,,231 26,,331 29.,281 3 ,833 ; 3 ,509 ; 3 ,306 3,,712 2 ,198 Annual growth rate for monthly data is the annualized monthly percentage increase in depus i Net New Money is new deposits net of both withdrawals and interest. Data for SM.s rf^e lor 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 Hanks and Federal Home Loan Hank Hoard. N I;T NEW MONEY 5 ---— --- T A B L E 11: Mortgage Commitments at Selected Thrift Institutions 1 OUTSTANDING COMMITMENTS | NET CHANGE ALL ALL MUTUAL | SAVINGS SAVINGS & TOTAL SAVINGS & BANKS LOAN LOAN (N.Y. STATE) ASSOCIATIONS ASSOCIATIONS (Billions of Dollar:i, Seasonally Adjusted)r/ DATE TOTAL 1971-Dec. 16.6 13.1 3.6 .09 1972-Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. j 18.0 19.1 19.7 20. 1 20.6 20. 7 21.0 21.8 22.9 23.6 24.3 24.9 14.1 15.0 15.4 15.7 16.2 16.3 16.5 17.3 18.1 18.7 19.4 20.0 3.9 4.1 4. 3 4.4' 4.4 4.4 4*5 4.5 ' 4.8 4.9 4.9 4.9 .24 .67 .49 .42 .60 .53 .36 .83 .99 .73 .73 .68 1973-Jan. Feb. Mar . 25.9 26.5 26.2 20.8 21.5 21.2 5.1 5.0 5 .0 .98 .59 .57 MUTUAL SAVINGS BANKS (N.Y. STATE) .15 -.06 ^ . 13 .28 .11 . 13 .05 -.07 . 10 :o7, .22 . 10 .04 .03 .11 .39 .38 .29 .55 .60 .26 .76 .77 .63 .69 . 65 .17 10 - .21 .81 .69 -.36 , Rased 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. 16 T A B L E 12: Net Change in Mortgage Holdings TOTAL INCLUDING FNMA-GNMA DATE FINANCIAL INSTITUTIONS LIFE 1 MUTUAL SAVINGS &| INSURANCE SAVINGS LOAN TOTAL 1 COMMERCIAL BANKS BANKS ASSOC. , COMPANIES 1 2,052 2,348 1,221 4,375 4,909 2,388 4,717 5,563 4,918 4,684 4,984 5,811 1,500 1,600 1,400 1,400 1,500 1,000 438 553 502 472 517 598 2,758 3,313 2,926 2,673 2,712 3,101 79 97 90 139 255 1,112 164 368 137 95 130 132 3,565 3,678 n.a. 900 900 1,200 458 331 n.a. 2,045 2,428 3,303 162 19 195 66 69 36 387 116 147 292 34 -24 70 96 19,699 16,827 39,259 Dec 4,872 5,931 5,286 4,779 5,114 5,943 1973 - Jan Feb Mar 3,760 3,744 n.a. 1972 - July Aug Sept Oct 2/ FXMA-CXMA Not Seasonally Ad lusted 2,682 9,561 5,404 10,172 2,462 1,845 3,938 24,160 9,940 24,074 21,736 41,647 1969 1970 1971 1 Seasonally Ad lusted 1972 - Apr May June July Aug Sept Oct Nov Dec 4,363 4,908 5,176 4,849 5,471 4,748 4,714 5,282 5,697 4,327 4,521 5,060 4,593 5,179 4,714 4,738 5,212 5,601 1,361 1,434 1,489 1,451 1,477 1,155 1,393 1,524 1,164 400 453 516 472 515 537 484 513 525 2,481 2,567 2,959 2,678 3,108 2,911 2,726 2,876 3,130 85 67 96 101 79 111 135 299 782 1973 - Jan Feb Mar 4,501 4,371 4,273 4,259 n.a 1,112 1,079 1,262 475 388 2,467 2,730 3,371 219 62 n.a. 1 2 228 112 124 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 87 per cent of the net increase estimated for all holders in 1967. Beginning January 1972 data reflect activity in limited amount of conventional mortgages . 17 T A B L E 13: Net Increases in Mortgage Debt Outstanding ' Billions of dollars, SAAR TOTAL RESIDENTIAL 3 1- to 4FAMILY 1968 - I II III IV 28.1 26.4 25.5 29.6 19.4 18.2 17.2 20.4 16.3 15.0 13.6 16.5 3.1 3.2 3.5 3.9 1969 - I 32.0 29.1 25.8 25.2 23.8 21.5 18.7 18.5 19.4 16.8 14.0 13.1 1970 - I II IIL IV 20.7 22.9 ?8.5 31.8 14.4 16.8 21.3 22.8 1971 - I II III IV 37.5 47.8 52.2 54.2 1972 - I II III IV 1973 - 1- QUARTER I I I I I IV MULTIFAMILY COMMERCIAL MULTI-AND COMMERCIAL FARM 6.4 6.0 . 6.5 7.4 9.5 9.2 10.1 11.3 2.3 2.2 1.8 1.9 4.4 4.6 4.7 5.4 ' 6.0 5.4 5.3 5.3 10.4 10.1 10.0 10.7 2.2 2.2 1.7 1.4 9.4 11.6 15 .0 16.2 5.0 5.2 A 1 6.6 4,8 4.6 9 1 6.8 9.8 9.8 11^5 13.4 27.3 36.0 38.9 40.7 19.2 26.5 30.1 31.9 8.0 9.4 8.8 8.9 8.1 9.5 11.1 11.0 I6'1 18.9 19.8 19.9 2.2 2.3 2.3 2.5 62 .4 64 .9 65.2 68.4 45.4 47.1 47 .3 50.6 35.9 37.5 38.5 40.2 9.5 9.6 8.8 10.4 14.5 15.2 15.2 15.4 23.9 24.8 24.0 25.8 2.6 2.6 2.6 2.5 80.9 59.7 48.5 1L2 18.1 29.2 3.1 ' 1.5 1.5 _2 1 2.2 1 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 nonfarm mortgage debt by type of property, where not available, and interpolation* and extrapolations, where required, estimated mainly by Federal Reserve. 2 May differ somewhat from related flow of funds series mainly because of more aggregative type of seasonal adjustment. 3 Residential mortgage debt includes nonfarm only and is sum of 1-to 4- family and multifamily mortgage debt combined. 18 TABLE 14: FNMA BIWEEKLY AUCTION RESULTS (FHA/VA LOANS) TOTAL OFFERS (MILLIONS $) YIELD TO FNMA. (PER CENT) RECEIVED ACCEPTED 1972 - Oct. 16 30 271.2 186.4 224.9 162.7 7.73 7.74 Nov. 13 27 78.7 60.8 49.2 36.6 7.72 7.70 Dec. 11 26 82.2 108.7 42.4 66.3 7.68 7.69 1973 - Jan. 8 22 74.2 107.0 61.3 92.1 7.69 7.70 Feb. 5 19 128.7 110.3 65.4 71.6 7.71 7.73 Mar. 5 19 170.8 297 .3 107.7 168.7 7.75 • 7.81 Apr. 2 16 30 234.6 216.6 261.2 145.9 190.7 185.9 7.86 7.89 7.92 Note: Average secondary market yields are gross--before deduction of 38 basis-point fee paid for mortgage servicing. They reflect the average accepted bid yield for home mortgages assuming a prepayment period of 12 years for 30-year loans, without special adjustment for FNMA. commitment fees and FNM& stock purchase and holding requirements. Data are for short-term (4 month) commitments. 19 TABLE 15: Private Housing Starts and Permits STARTS DATE SEASONALLY ADJUSTED ANNUAL RATE TOTALIi -FAMILY 12 OR MORE $ - January February March j2 ,497 j 2,,457 2: ,259 TOTAL 150.9 153.6 205.8 213.2 227.9 226.3 207.5 231.0 204.4 218.2 187.1 150.5 36.1 7.5 27.8 8.0 37.7 10.5 29.1 8.5 32.4 9.4 31.9 9.6 26.2 9.4 30.3 9.9 28.2 8.9 25.4 8.5 21.3 8.0 42.3 5.8 107.3 117.8 155.7 172.9 186.1 184.8 171.9 | 190.8 ! 167.3 ! 184 . 3 157.8 102.4 2,204 2,056 2,007 1,991 1,955 2,121 2,108 2,237 2,265 2,216 2,139 2,377 147.4 139.5 12.0 14.3 6.8 6.8 128.6 118.4 8.3 -- 2,218 2,191 2,093 |- ! 2 ,439 2.,540 I 2 ,313 2 ,204 2 ,318 2.,315 2.,244 July August ! 2,,424 September i2 ,426 October (|2,,446 November 2,,395 December 2.,369 I - January February March April May | | ' x 1,395 1,281 1,310 1,215 1,308 1,283 1,319 1,373 1,382 1,315 1,324 1,207 1,044 1,260 1,003 989 1,011 1,032 925 1,051 1,045 1,131 1,071 1,162 1,450 1,377 1,239 1,047 1,080 1,020 I ! ! BUILDING PERMITS (SEASONALLY ADJUSTED ANNUAL RATE) 2 UNADJUSTED ^ TYPE OF FINANCING FHA VA 1 OTHER 201.2 . 1 Total starts are Census estimates including farm for both permit-issuing and now-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. 2 Building permits are Census estimates based on 13,000 or all known permitissuing places. Unlike starts, seasonally adjusted building permits reflect direct adjustment for differences in the number of days per month, as well as other differences in timing and coverage. 20 TABLE 16: Mortgage and Bond Yields , DATE FHA MORTGAGES 30-year 2 CONVENTIONAL MORTGAGES 3 SPREAD BETWEEN YIELDS ON CONV. & FHA MORTGAGES 5 1 NEW ISSUE Aaa UTILITY 4 SPREAD BETWEEN YIELDS ON NEW CORPORATE BONDS AND FHA MORTGAGES 6 .. -52 -.36 1971 - High Low 7.97 7.32 7.95 7.55 .28 -.19 8.26 7.02 1972 - High Low 7.57 7.45 7.70 7.55 .14 .06 7.40 7.09 .61 .05 1972 - Jan. Feb. Mar. Apr. May June July August September October November December 7.49 7.46 7.45 7.50 7.53 7.54 7.54 7.55 7.56 7.57 7.57 7.56 7.60 7.60 7.55 7.60 7.60 7.60 7.65 7.65 7.70 7.70 7.70 7.70 .11 .14 .10 .10 .07 .06 .11 .10 .14 .13 .13 .14 7.21 7.34 7.24 7.45 7.38 7.32 7.38 7.37 7.40 7.38 7.09 7.15 .28 .12 .21 .05 .15 .22 .16 .18 .16 .19 .61 .55 1973 - Jan. Feb. Mar. 7.55 7.56 7.63 7.70 7.75 .15 .19 .17 7.38 7.40 .32 .35 .31 1 2 3 4 5 6 7.CO 7.49 Neither mortgage nor bond yields include allowance for servicing costs which arc much higher for mortgages than for bonds. Generally, bonds pay interest semi annually; 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. Based on FHA-field-office opinion on typical contract interest rates (rounded) on conventional first mortgages prevailing in the market areas of insuring offices. See note for Table 1. yield spread equals conventional mortgage rate less FHA secondary market yield. Yield spread equals FHA secondary market yield less new Aaa corporate bond yield. T A B L E 17: Conventional Mortgage Terms DATE 1972 Jan. Feb. Mar. Apr. May July Aug. Sept. Oct. Nov. Dec. 1973 4/ Jan. Feb. Mar. Apr. 1 2 3 JNEW HOMES CON- FEES & TRACT CHARGES EFFEC- MATURITY RATE (PER TIVE I (YlARS) CENT) RATE ! (PER CENT) 2 1 LOAN / PRICE LOAN RATIO AMT (PER ($000) CENT) 1 EXISTING HOMES CON- FEES & LOAN / TRACT CHARGES EFFEC- MATU- PRICK (PER RATE TIVE RITY RATIO CENT) RATE (YEARS) (PER (PER CENT) CENT) 2 3 7.62 7.45 7.38 7.38 7.40 7.41 7.43 7.45 7.43 7.48 7.50 7.51 0.95 1.02 0.84 0.83 0.84 0.85 0.83 0.86 0.86 0.88 0.91 0.92 7. 78 7. 61 7.,52 7.,51 7. 53 7. 55 7. 56 7. 59 7. 57 7. 62 7. 65 7. 66 26 5 27 0 27..2 27,.2 27..2 27..2 27..2 27.,5 27.,3 27. 2 27.5 27. 5 75 0 76 5 76..2 76..0 76.,2 76.,5 77.,0 77. 5 77. 5 77. 3 77. 3 78.0 27. 6 27. 8 28.2 28. 5 2.8.5 27. 8 28. 2 27. 9 27. 9 27. 4 28. 0 29. 1 7.45 7.35 7.31 7.30 7.33 7.36 7.37 7.39 7.42 7.43 7.44 7.45 0.82 0.79 0.77 0.78 0.77 0.78 0.83 0.81 0.83 0.84 0.84 0.86 7.58 7.48 7.44 7.42 7.46 7.49 7.50 7.52 7.55 7.57 7.58 7.59 24. 7 25.,4 25.,1 25.,2 25. 2 25.,5 25. 6 26. 3 26. 2 26. 1 26. 3 26. 4 74.7 75.8 75.6 75.3 75.4 76.1 76.2 76.5 76.5 76.3 76.8 76.8 24.1 24.8 24.4 24.9 24.6 25.2 25.2 25.4 24.8 25.0 25.4 25.7 7.52 7.52 7.51 7.53 1.03 1.15 1.09 1.09 •7. 68 7. 70 7. 68 7.,70 25.,7 26. 8 26.,6 26 .7 76. 6 78. 6 78.4 78.0 27. 0 27. 6 28. 3 27. 7 7.53 7.55 0.94 1.03 7.68 7.72 23 .2 23.6 75.2 77.5 22.6 22.0 7.54 7.54 .95 .97 7.69 7.70 23. 3 24,.2 76.9 77.5 22.0 23.0 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. 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. Includes fees & charges amortized over a 10 year period in addition to the contract interest rate/' 4 LOAN AMT. ($000, Beginning January 1973, series revised. to data on or after that data. Data before January 1973 not comparable ^