Financing Home Ownership
DATA on the extent to which credit is used in financing home ownership suggest that in the majority of cases a portion of the funds is borrowed, that this majority is increasing, and that the proportion of the total price borrowed is also increasing. The general impression obtained from observation of the market is that, although these proportions may vary from time to time, only a small minority of purchasers pay cash in full.
In 1931, the Committee on Finance of the President's Conference on Home Building and Home Ownership canvassed a number of builders and real estate brokers on the West Coast on the subject of financing practices. At that time, builders indicated that 13 percent of their sales were made for all cash, and real estate brokers, 9 percent.1 A later study, covering 1946 and 1947, stated that 16 percent of all home purchasers paid cash in full.2 This impression is supported by census data on the status of indebtedness on owner-occupied homes (Table 8). In 1890, 27.7 percent of all owner-occupied homes were reported as mortgaged and, as of 1940, 45.3 percent.3 The percentage has risen at each census date in every census region except two -- the West North Central region which declined from 31.9 in 1890 to 27.1 in 1900, and the South Atlantic region which dropped from 23.2 in 1900 to 22.9 in 1910. The highest percentages have consistently been reported from the New England and Middle Atlantic states and, with one minor exception, the lowest percentages were in the East South Central and West South Central regions.____________________