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I DECONTROLLED' AFTER SIX MONTHS L.5.8 Confidents CAPITAL MARKET DEVELOPMENTS Capital Markets Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D. C. September 13,1971 INDEX Developments in the Corporate and Municipal Bond Markets Capital Market Yields Capital Market Volume Stock Market Mortgage Market SYMBOLS: Estimate Preliminary Revised Not available TABLE 1: Yields, Volume and Reception WEEK ENDING: 1971 - Aug. 6 13 20 27 Sept. 3 10 17 WEEK ENDING: 1971 - Aug. 6 13 20 21 Sept. 3 10 17 YIELDS MOODY'S SEASONED NEW ISSUE 1 Aaa 8.02 7.97 7.33 7.48 7.38 7.21 n.a. 8.69 7.71 7.51 7.50 247 194 239 383e 100 100 76 79 n.a. 7.45 7.42 n.a. 413 285 725e 54 77 n.a. n.a. n.a. YIELDS BOND BUYER MOODY'S SEASONED 20 SEASONED Aaa BOND INDEX 5.88 6.07 6.03 5.80 5.15 5.49 5.71 5.45 5.30 5.00 CORPORATE BOND MARKET VOLUME,2. PER CENT GROSS SOLD BY END BONDS SCHEDULED OFFERINGS OF WEEK WITHIN 28 DAYS 5.39 5.36 n. a. MUNICIPAL BOND MARKET VOLUME2 PER CENT GROSS SOLD BY END OF WEEK OFFERINGS 203 72 80 570 232 90 78 415 474 371 300 e 91 34 n.a. ' BONDS SCHEDULED WITHIN 28 DAYS 1,076 588 750 970 805 848 n.a. 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: See footnotes to Table 3 TABLE 2: Details on Inventories DATE OFFERED AMOUNT (MIL. $) | 9/9 9/9 9/8 9/7 8/31 8/17 OFFERED 50.0 60.0 50.0 35.0 150.0 50.0 DATE | RELEXSED DATE 1971 - August 13 20 27 Sept. 3 10 CORPORATE BONDS IN SYNDICATE END OF LATEST WEEK ORIGINAL RATING AND YIELD CALL PROTECTION COUPON ISSUER J. E. Seagram & Son Eatin Corp Virginia El & Pwr Kentucky Utils Consolidated Ed Cinn Bell Tel 7 3/4 7.60 7.50 7.5/8 7.90 7.3/8 ESTIMATED PROPORTION SOLD 7.75 7.60 7.47 7.45 7.90 7.40 98% 98% 25% 25% 40% 85% CORPORATE BONDS RELEASED FROM SYNDICATE DURING LATEST WEEK ORIGINAL INCREASE RATING AND ESTIMATED PROISSUER COUPON AMOUNT YIELD IN YIELD CALL PROT. PORTION RELEASED INVENTORIES 1 MUNICIPALS BLUE LIST | IN SYNDICATE 168 533 32 495 105 586 569 555 N.C. - No call protection, | 1 All figures in millions of dollars. 67 243 CORPORATES IN SYNDICATE 0 58 82 240 164 Bide List is daily average for week ended Friday, except for latest v.t'fck v.'hich i = daily average of three days ended Wednesday. All other figures are as of Friday. TABLE 3: High Grade Bond Yields , DATE NEW CORPORATE Aaa 1 MOODY'S SEASONED CORPORATE Aaa 2 U.S. GOVERNMENT 20-YEAR CONSTANT MATURITIES 3 BOND BUYER1S SEASONED MUNICIPALS 4 1969 - High Low 8.85 (12/5) 6.90 (2/21) 7.84 (12/26) 6.55 (1/12) 6.97 (12/26) 5.96 (1/24) 6.90 (12/18) 4.82 (1/28) 1970 - High Low 9.30 (6/19) 7.68 (12/18) 8.60 (7/3) 7.48 (12/31) 7.55 (5/29) 6.17 (12/18) 7.12 (5/29) 5.33 (12/11) 1971 - High Low 8.23 (5/12) 6.76 (1/29) 7.71 (8/13) 7.06 (2/12) 6.51 (6/18) 5.69 (3/23) 6.23 (6/24) 5.00(3/18) 1971 - Aug. 13 20 27 7.97 7.33 7.48 7.71 7.51r 7.50 6.41 6.12 6.19 6.03 5.49 5.71 Sept. 3 10 7.38 7.21 7.45 7.42 6.06 li. a. 5.39 5.36 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. 1 2 6 . J A B L E 4: Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) GROSS PROCEEDS 1 STATE AND LOCAL 2 CORPORATE PERIOD 1971 1970 1969 1971 1970 t 1969 ; i f F- January February March 3,115 3,000 6,075 2,636 1,802 3,539 2,075 1 2,705 2,045 | 1,839 2,098 ! 2,144 . 1,340 1,214 1,555 1,262 987 April May June 4,007 3,271? 4,375 3,170 3,909 3,389 2,748 k 1,907 2,076 2,135 2,530 2,008 1,647 996 1,085 1,801 1,110 737 July August September 4,000e 2,850e 2,768 2,274 2,518 2,478 1,427 2,427 1,348 1,359 1,758 1,097 808 559 3,777 4,182 3,980 1,933 2,375 2,532 1,924 1,748 2,190 1,280 886 816 12,190 11,654 7,977 10,468 a,560 11,939 6,218 7,354 6,332 6,840 6,688 6,050 4,109 3,728 4,465 5,862 2,787 13,648 ff 2,464 ' 2,982 [ 23,844 18,445 27,005 38,944 13,572 19,904 26,744 12,738 7,837 12,302 18,164 6,435 I 8,899 C 11,881 J1 «• October November December 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 1st half Three quarters Year Excluding finance companies3 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Year . 1,928 l,828e 538 6,170 7,037 t ^ ; i ; I 8f f i. | 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. t ' i i & ; • TABLE 5: New Corporate Security Issues, Type of Issue and Issuer (In millions of dollars) QUARTER OR MONTH TOTAL GROSS PROCEEDS BY TYPE OF ISSUE COMMON AND MEMO: BONDS PUBLICLY PRIVATELY PFD. ISSUES INCLUDED MFG. PLACED STOCK FOREIGN | CONVERTIBLE OFFERED GROSS PROCEEDS BY TYPE OF ISSUER, PUBLIC UTILITY COMMUNICATIONS OTHER ISSUERS1 10,468 8,560 11,938 12,190 11,688 6,994 5,987 7,827 8,369 6,546 1,282 914 1,421 1,516 1,758 2,190 1,659 2,690 2,306 3,384 135 83 226 84 215 710 287 737 724 1,351 2,445 2,314 3,169 3,794 3,130 2,812 2,714 3,406 3,197 2,910 2,162 868 1,346 1,606 896 3,048 2,663 4,020 3,594 4,753 1970 - June July Aug. Sept. Oct. Nov. Dec. 3,389 2,768 2,274 3,518 3,777 4,181 3,979 1,931 1,831 1,731 2,425 2,390 3,001 2,436 436 320 205 389 304 283 834 1,021 617 338 704 1,083 898 709 26 68 11 4 56 11 159 82 107 59 121 388 184 165 939 638 . 682 994 1,006 1,107 1,056 1,103 843 630 1,241 1,101 1,350 955 353 144 279 445 371 693 282 994 1,143 682 838 1,300 1,033 1,687 1971 - Jan. Feb. Mar. 3,115 3 ,000 6,075 2,033 2,201 4,135 594 275 647 489 524 1,293 43 3 38 99 168 557 716 661 2,4,17• 676 1,069 1,452 I 391 683 532 1,332 587 1,675 273 405 218 1,615 350 1,367 1,489 1,897 1,225 1.215 1970 - II III IV IV 1971 - I II 1 4,042 2,116 507 1,419 116 384 Apr. 1,135 1,267 633 2,148 3,271 491 47 255 588 May 588 2,282 1,332 760 52 712 1,206 1,055 June \ 4,375 2,250 4,000 1,250 500 e/july n.a. 165 600 560 950 n.a. 300 ej Aug. 2,850 485 800 1,400 750 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. I TABLE 6: Large Long-term Public Security Issues for New Capital (Other than U.S. Treasury) 1 aepu. i linru &epc. iv ISSUER TYPE 2 AMOUNT (MILLIONS OF DOLLARS) MATURITY COUPON RATI-! OR NET INTEREST COST . OFFERING YIELD MOODY'S RAT I N(.. Corporate Vepco Kentucky Utilities Co Chrysler Finance Corp Joseph E. Seagram & Son Vepco Tidewater Marine Service Colwell Mtg Trst. 1st mtg 1st mtg debs debs Com stk debs debs 50.0 35.0 60.0 50.0 80.0 15.0 15.0 2001 2001 1991 1996 — 7.50 7.62 8.35 7.75 7.47 7.45 8.35 7.is 5.75 5.75 6.50 •» 1991 1991 / Aa -- A Ba TABLE 6: Large Long-term Public Security Issues for New Capital (continued) (Other than U.S. Treasury)1 ! ISSUER TYPE 2 AMOUNT (MILLIONS OF DOLLARS) MATURITY COUPON RATE OR NET INTEREST COST Sept 1 thru sept 10. 1971 | | OFFER - MOODY'S , 11,(1 RATING j YIELD State and Local Puerto Rico Aqueducts & Swr Auth Puerto Rico Aqueducts & Swr Auth Middelsex Co. N.J. Onondaga Co., N.Y. New Jersey, State of California, State of Arlington Co., Va Rev bonds 11.0 Bonds 16.0 12.3 Bonds 12.9 G.O. 75.0 G.O. 100.0 G.O. 20.0 G.O. 1973-1997 2004 1972-1988 1972-2001 1975-2001 1972-1991 1973-1992 6.01 6.01 4.66 4.46 4.61 3.40-5.90 6.10 3.00-5.00 2.75-5.00 3.40-5.40 2.85-5.10 3.30-5.60 Notes Notes 1986 1976 7.50 6.63 7.50 6.63 A A Aa Aaa Aaa Aa A-l Other Farmers Home Admin Farmers Home Admin 300.0 149.9 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 gem-rat obligation; Re'v.-Ut., revenue obligations secured only by income from public utilities; Rev.-Q.-Ut., revenue bonds secured only by incomc from quasi—utilities; Rvv.-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. — TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury) 1 ISSUER TYPE AMOUNT (MILLIONS OF DOLLARS) APPROXIMATE DATE OF OFFERINO Corporate Central Illinois Pub Serv Co 1st mtg Hall Craft Homes Inc Debs Cenco Instrument Corp Debs Southwestern Bell Telephone Debs Iowa Public Service 1st mtg Central Tele Co. 1st mtg Central Illinois Light Co Bonds Florida Gas Co. Conv debs Essex^Lnternational Inc. Debs Lincoln First Bank Inc. Debs Debs Mobile Oil -Qorp 1st mtg Tucson Gas & Elec Public Service Co. of N.Mexico 1st mtg San Diego Gas & Elec Co. Bonds Median Mortgage investors Debs Barnett Mtg." Trst. Conv debs Southern Calif Edison 1st ref mtg Columbia Gas System Inc Debs Gen'l Motors Accept Corp Debs Union Elec Co Bonds Quebec Hydro-Elec Comm. Debs Consolidated Natural Gas Debs Bank of California Conv debs Instrument Systems Corp Debs Continental Can Co Notes Genstar Ltd Debs Valu Vend Credit Corp Debs Cleveland Elec 111 Com stk Monumental Corp Notes Beneficial Corp Bonds Beneficial Corp Bonds Microdot Inc. Notes Central Telephone & Utility Cor; 1st mtg General Telephone Co. of the S.I .Bonds Debs Equimark Corp Debs C&P Tele Co. of Md. General American Trans Corp Equip tr ctfs Westinghouse Credit Corp S.F. debs Tenneca'Inc 1st mtg pipeline Debs Ohio Bell Telephone Co Bonds Gen'l Telephone Co of the S.W. 1st mtg Florida Pwr Co 1st mtg Pacific Pwr & Light Co Debs Carolina Telephone & Telegraph 22,5 15.0 30.0 200.0 15.0 25.0 30.0 25.0 50.0 35.0 200.0 25.0 20.0 45.0 20.0 20.0 100.0 60.0 200.0 60.0 75.0 25.0 20.0 25.0 60.0 25.0 25.0 50.0 20.0 25.0 50.0 20.0 20.0 40.0 15.0 100.0 50.0 40.0 Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. 13 14 14 14 14 14 15 15 15 15 15 15 16 16 16 18 20 22 22 22 22 30 100.0 150.0 40.0 50.0 35.0 20.0 Oct. Oct. Oct. Oct. Oct. Oct. 5 5 6 12 12 " i.i TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury) 1 A s of Sept 1 0 , 1 9 7 1 ISSUER TYPE AMOUNT (MILLIONS OF DOLLARS) APPROXIMATE DATE OF OFFERING State and Local Mass Health & Ed Facil Auth New York State Pwr Auth Brookline, Mass Norfolk Port & Industrial Auth Brookline, Mass., Co. Mississippi, State of Pittsburgh S/D, P.A. Baltimore Co Honolulu, Hawaii Georgia Education Auth Port of Tacoma, Wash Penna, State of Kentucky Turnpike, Auth, Buffalo, New York Sacramento MUD, Cal., Guilford Co., N.C. I Bonds Rev. G.O. Rev. G.O. G. 0. G.O. G.O. G.O. Rev. Rev. G.O. Rev. G.O. Rev. G.O. Other Federal National Mtg Assn Municipal Finance Auth of British Col HUD Debs 250.0 Sept. 15 Debs Bonds 21.0 Sept. Sept. 20 29 11.0 100.0 10.2 26.5 10.0 20.0 15.0 30.0 30.0 15.7 15.7 50.0 85.0 19.5 50.0 10.0 258.2 Sept. 14 Sept. 14 Sept. 15 Sept. 15 Sept. 15 Sept. 16 Sept. 21 Sept. 21 Sept. 21 Sept. 21 Sept. 23 Sept. 28 6 Oct. Oct. 7 27 Oct. Nov. 9 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. 12 Table 8 STOCK PRICES AND VOLUME TRADING V O L U M E 2 ' STOCK P R I C E S 1 ' DATE NYSE I N D E X 3 ' D J . INDUSTRIALS AMEX NYSE AMEX* 1969 - High Low 50.32 (5/14) 49.31 (7/29) 968.85 (5/14) 32.91 (1/3) 769.93 (12/17] 25.02 (7/29) 16.5 (3/29) 8.6 (8/29) 8.0 3.6 (1/31) (11/21) 1970 - High Low 52.36 (1/5) 37.69 (5/26) 842.00 (12/29] 27.02 (1/8) 631.16 (5/26) 19.36 (5/27) 18.5 (12/4) 7.8 (8/14) 7.1 1.8 (1/2) (8/14) 1971 - High Low 57.76 (4/28) 950.82 (4/28) 26.68 (4/28) 830.57 (1/4) 22.72 (1/4) 48.73 (1/4) 22.1 (2/12) 11.0 (8/13) 6.7 2.7 (2/12) (8/13) 52.07 52.88 54.38 55.52 850.61 856.02 880.91 908.15 24.37 24.59 25.13 25.27 12.5 11.0 21.1 15.3 3.0 2.7 5.1 3.5 3 55.66 10 55.56 912.75 911.00 25.61 25.66 11.4 14.6 3.1 3.3 1971 - Aug. Sept 6 13 20 27 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 = 5 0 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 CREDIT EXTENDED TO MARGIN CUSTOMERS BY: BROKERS 1 | BANKS 2 | TOTAL 3,800 July Aug. .3,810 Sept. .3,920 Oct. 4,010 4,010 Nov. 4,030 \ Dec. 2,290 2,300 2,330 2,270 2,320 2,330 6,090 6,110 6,250 6,280 6,330 6,360 (4) (4) (4) (4) (4>(4) 4,000 4,090 4,300 4,530 4,620 4,720 4,790 2,300 2,330 2,360 2,340 2,340 2,390 2,420 6,300 6,420 6,660 6,870 6,960 7,110 7,210 (4) (4) (4) (4) (4) (4) (4) - 60 10 110 90 20 - 10 30 - 60 50 10 - 60 20 140 30 50 30 - 30 90 210 230 90 100 70 - 30 30 30 - 20 - 50 30 - 60 120 240 210 90 150 100 1970 .1971 - Jan. Feb. Mar. Apr. -May June July Change in Outstanding 1970 July Aug. Sept. Oct. Nov. Dec. 1971 - Jan. Feb. Mar. Apr. May June July 2 3 4 5 CUSTOMERS' NET DEBIT BALANCES - „ - - - - - - - - ' — — . - - - - •~ . ~ NET CREDIT CUSTOMERS' NET EXTENDED BY BROKERS AND FREE CREDIT DEALERS 3 BALANCES (5)2,180 2,083 2,236 2,163 2,197 2,286 (4) (4) (4) (4) (4) (4) 2,452 2,743 2,798 2,660 2,550 2,440 2,210 (4) (4) (4) (4) (4) (4) (4) 171 97 153 - 73 34 89 166 291 55 -138 -110 110 230 - - - - - - - - - - — — - - - - - - " - • - - - 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. Series discontinued. Changes in series. TABLE 10: Savings Flows at Nonbank Depositary Intermediaries z DATE ($ millions) MUTUAL SAVINGS BANK£ SAVINGS & LOAN ASSOCIATIONS REGULAR DEPOSITS 3 NET NET SHARE CAPITAL ANNUAL NEW NEW ANNUAL 2 GROWTH MONEY NET NET MONEY2 GROWTH 1 FLOW RATE 1 FLOW RATE TOTAL DEPOSITS ANNUAL NET GROWTH FLOW RATE 1 NET, NEW MONEY 2 Not Seasonally Adjusted 1968 1969 1970 4 ,203 2 ,549 4 ,466 7.0 4. 0 6 7 1,143 -763 936 7,432 4,200 11,173 1970 - June July August 504 297 176 -- -133 174 81 1,801 543 550 1971 - June r/ July £/ August 2/ 935 416 300 277 276 200 3,092 1,531 1,100 -•- — — - 6.0 3.2 8.2 2,738 -1,003 5,295 11,635 6,749 15,639 280 485 511 2,305 840 726 1,275 1,438 n.a. 4,027 1,981 1,400 -— . —. mm mm - 6.,3 3.,4 7.. 7 3,881 -1,766 6,231 147 659 592 — 1,552 1,714 -/ Seasonally Adjusted __ —— 1971 - January 916 15,.5 3,619 29.8 4,535 25,.1 February -946 15,.8 2,472 19.8 — 3,418 18,.5 March —— 21,,2 1 ,287 3,376 26.7 4,663 24,.9 " — — 4,173 -April 1 ,176 19,.0 2,997 , 23.1 21,.8 May -— 12,.6 795 1,996 15.1 2,791 14.3 —— -June r/ 818 12,.9 2,152 -16.1 2,970 15,.1 --566 July 2/ 8 .8 2,578 19.0 3,144 15,,8 • V 1,701 —— August £J 425 6,.6 1,276 9.3 8 .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 967= 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. TABLE 11: Mortgage Commitments at Selected Thrift Institutions OUTSTANDING COMMITMENTS ALL MUTUAL SAVINGS & SAVINGS LOAN BANKS (N.Y. STATE) ASSOCIATIONS NET CHANGE ALL TOTAL SAVINGS & LOAN ASSOCIATIONS (Billions of Dollars, Seasonally Adjusted) 1/ DATE 1970 - June July Aug. Sept. Oct. Nov. Dec. 1971 - Jan. Feb. Mar. Apr. May r/ June 1 MUTUAL SAVINGS BANKS (N.Y. STATE) 8.2 6.1 2.1 2.0 .17 .37 .26 .41 -.09 -.04 9.8 8.9 9.3 9.6 6.8 2,0 1.8 1.8 1.8 2.0 .21 .25 .30 .35 .51 .29 .36 .37 .34 .28 -.08 -.11 -.07 .01 .23 2.1 2.3 2.5 2.8 3.1 3.1 .25 .80 1.36 1.30 1.56 .77 .20 .60 1.16 1.01 1.21 .72 .05 .20 .20 .29 .34 .05 8.6 10.1 10.4 11.2 6.5 \ 7.1 7.5 7.8 8.1 8.3 8.9 12.6 10.1 16.1 13.0 g-> 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. 16 TABLE 12: Net Change in Mortgage Holdings DATE FINANCIAL INSTITUTIONS LIFE MUTUAL SAVINGS & INSURANCE SAVINGS LOAN COMPANIES BANKS ASSOC. TOTAL INCLUDING FNMA-GNMA COMMERCIAL BANKS Not Seasonally Adjusted 20,016 23,781 24,189 21,822 18,219 21,273 19,814 16,913 4,639 6,677 5,404 2,462 3,153 £,787 2,682 1,845 7,520 9,350 9,676 10,288 2,907 2,459 2,052 2,318 1,797 2,508 4,375 4,909 1970 - May June July 1,548 2,136 2,089 1,170 1,739 1,626 125 187 200 144 209 160 723 l.;i-40 1,079 178 203 187 378 397 463 May June July 3,154 4,444 n.a. 3,204 4,311 700 1,200 900 303 435 389 2,185 2,693 2,479 16 -17 -50 133 789 1,055 983 1,104 1,175 1,289 1,710 1,311 1,425 1,774 2,044 2,095 2,339 2,452 222 213 83 151 200 131 232 24 97 154 38 25 23 468 508 408 364 320 229 100 -33 -87 1967 1968 1969 1970 2./ 1971 Seasonally Adjusted 1971 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July 1,749 2,083 1,917 2,192 2,128 2,049 2,604 1,860 1,997 2,888 2,739 3,080 4,077 1,281 1,575 1,509 1,828 1,808 1,820 2,504 1,893 2,084 2,896 2,818 3,073 3,872 81 165 268 328 295 224 312 383 345 588 453 640 1,097 869 189 142 175 245 138 176 250 175 217 380 283 313 413 373 -8 -79 7 205 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 84 per cent of the net increase estimated for all holders in 1970. 17 TABLE 13: Net Increases in Mortgage Debt Outstanding Billions of dollars, SAAR QUARTER TOTAL RESIDENTIAL 1- to 4FAMILY MULTIFAMILY COMMERCIAL MULTI-AND COMMERCIAL FARM 5.5 4.1 8.2 6.0 2.2 1.8 1966 - II IV 18.6 15.1 10.9 9.1 8.3 7.0 2.6 2.1 1967 - I II III IV 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 II III , IV 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 II III IV 31.3 28.9 26.5 25.1 25.0 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 IO.O 10.7 2.2 2.2 H 1.4 1970 - I II III IV 20.2 22.7 28.5 30.5 13.8 16.9 21.2 21.6 8.8 11.5 14.9 15.1 5.0 5.4 6.3 6.4 4.9 4.3 5.2 6.9 9.9 9.7 11.5 13.3 1.5 1.5 2.1 2.1 1971 - Ip 32.9 22.6 15.6 7.0 8.3 15.3 2.0 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 interpolations 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. . Residential mortgage debt includes nonfarm only and is sum of 1-to 4- family 3 and multifamily mortgage debt combined. • - \ TABLE 14: T'NMA "Auction" Results WEEK ENDED Apr. 12 26 IMPLICIT YIELD2(per cent) COMMITMENTS IN $ MILLIONS 1 ACCEPTED 1-YEAR 1 1-YEARH 9090TOTAL TOTAL 6& OVER DAY MONTH & OVER DAY MONTH OFFERED V 126.9 687.2 54.5 313.9 39.8 154.0 9.4 126.6 5.4 33.4 7.32 7.43^ 7.45 7.54 7.53 7.57 May 10 24 1,168.0 785.7 236.8 151.6 145.8 44.6 71.3 84.4 19.7 22.6 7.57 7.95 7.68 7.97 7.74 8.03 June 1 14 28 322.4 664.4 539.3 146.6 191.2 262.2 77.1 133.7 191.8I 57.8 47.3 60.3 11.6 1^0.2 10.4 8.05 7.91 7.92 8.18 8.15 8.22 8.16 8.22 8.28 July 12 26 606.0 686.2 241.1 183.4 161.8i 183.4 58.2 21.1 7.98 8.07 8.23 8.31 Aug. 25 634.6 153.5 153.5 -- 7.97 Sept. 7 445.2 188.6 188.6 -- 7.88 " " -• — -- Note: Under the FNMA auction system, approved sellers of Governmentunderwritten mortgages bid for FNMA forward purchase commitments, 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. ' 19 TABLE 15: Private Housing Starts and Permits STARTS DATE SEASONALLY ADJUSTED ANNUAL RATE TOTAL 1-FAMILY 2 OR MORE 1970 - June July Aug. Sept. Oct. Nov. Dec. 1,393 1,603 1,425 1,509 1,583 1,693 2,054 835 827 838 881 890 934 1,240 1971 - Jan. Feb. Mar. Apr. MayJune July 2/ 1,725 1,754 1,959 1,912 1,975 995 2,218 946 985 1,048 1,098 1,124 1,174 1,177 1 2 558 776 587 627 693 759 814 779 769 911 814851 821 1,041 UNADJUSTED TYPE OF FINANCING FHA VA OTHER BUILDING PERMITS (SEASONALLY ADJUSTED ANNUAL RATE) 2 135.2 140.8 128.7 130.9 140.9 126.9 121.4 40.7 43.3 34.1 34.3 40.4 33.7 63.2 5.1 5.3 5.6 5.3 5.8 5.5 5.7 89.4 92.1 87.7 91.3 94.7 87.2 52.5 1,285 1,309 1,378 1,388 1,523 1,487 1,768 110.6 32.2 27.3 33.4 44.6 40.7 46.1 42.0 4.6 4.7 6.9 8.5 8.4 9.3 9.3 72.8 68.4 127.6 148.0 149.4 137.8 142.6 1,635 1,563 1,627 1,638 1,927 1,849 2,072 102.2 167.9 201.1 198.5 193.2 193.9 Total starts are Census estimates including farm for both permit-issuing and nou-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 are for 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. / 2o TABLE 16: Mortgage and Bond Yields FHA .MORTGAGES DATE 30-year 2 CONVENTIONAL MORTGAGES 3 SPREAD BETWEEN YIELDS ON CONV. & FHA MORTGAGES 5 1 NEW Aaa CORPORATE BONDS 4 SPREAD BETWEEN YIELDS ON NEW . CORPORATE BONDS AND FHA MORTGAGES 6 1968 - High Low 1969 - High Low 7.52 6.78 8.62 7.99 7.40 6.75 8.35 7.55 .02 -.27 -.13 -.40 6.79 6.15 8.75 6.91 1.20 . 26 1.08 -.13 1970 - High Low 9.29 8.40 8.60 8.30 -.10 -.74 9.11 7.80 .99 .01 1971 - Jan. Feb. Mar. Apr. May June July -- 7.95 7.75 7.60 7.55 7.65 7.70 7.80 n<a. n.a. .28 .18 -.10 -.19 -17 7.24 7.28 7.46 7.57 8.01 7.90 7.96 n.a. n.a. -.14 -.20 -.26 -.01 .01 1 2 3 4 5 6 —— 7.32 7.37 7.75 7.89 7.97 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. Data shown are for 30-year mortgages with minimum downpayments, and weighted by probable volume of transactions. Yields computed by FHA, assuming prepayment period of 15 years for 30-year mortgages. Based on FHA-field-office opinion on typical interest rates (rounded) on conventional first mortgages prevailing in the market areas of insuring office cities. 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. TABLE 17: Conventional Mortgage Terms DATE 1 EXISTING HOMES NEW HOMES CON- FEES & LOAN/ LOAN/ CON- FEES & CHARGES EFFEC- MATU- PRICE TRACT PRICE LOAN TRACT CHARGES EFFEC- MATURITY (PER AMT. RATE RATIO TIVE RITY RATIO (PER (YEARS) RATE TIVE CENT) RATE (YEARS) (PER - (PER ($000) (PER CENT) RATE (PER CENT) CENT) CENT) CENT) 2 3 3 2 4 LOAN AMT. ($000) 4 8 .32 8..35 8.. 3 1 8,.33 8..26 8. .20 1.01 0.98 1.03 1.05 0.99 1.07 8.49 8.52 8.48 8.51 8.43 8.38 25, . 1 24. .8 25. .2 25. . 1 25. .3 25. .8 71,.5 71..6 72, .7 72.. 4 72..1 73. .8 24.9 25.5 25.3 24.8 25.2 25.8 8.21 8.25 8.27 8.20 8.18 8.12 0.95 0.89 0.88 0.88 0.85 0.85 8 .37 8 .41 8 .42 8 .35 8 .32 8 .26 23, . 1 23 1 22. .8 22. .8 22. .7 23. .3 71,.5 71 .5 71..7 71. .5 71. .5 71. .9 21.7 21.4 21.0 20.5 21.1 21.7 8 . 03 7. 74 7. 52 7 . 37 7.36 7. 38 7. 51 0.92 1.00 0.83 0.73 0.71 0.74 0.88 8.18 7.91 7.66 7.49 7.47 7.50 7.65 25. 8 26. 2 25. 9 26.3 26. 1 26. 3 26.2 73. ,3 73. 9 73. 7 73. 6 74. 0 73. 7 74.3 26.4 26.2 26.0 26.2 26.7 27.2 27.1 7.94 7.67 7.47 7.34 7.33 7.38 7.50 0.82 0.79 0.77 0.75 0.71 0.74 0.73 8.. 0 8 7.. 8 0 7.. 6 0 7.,47 7. 45 7. 50 7,.62 23. .5 24.0 24.1 24.2 24. 0 24. 3 24.2 72. ,5 73. ,1 73. 5 73. 6 73. 2 73. 9 74.4 22.0 22.5 23.0 23.1 23.3 28.3 23.3 1970 July Aug. Sept. Oct. Nov. Dec. 1971 Jan. Feb. Mar. Apr. May June July 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 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. '
@FedFRASER