Abstract

The importance of out-of-state lenders in providing mortgage support for California construction has been known for some time-the role of out-of-state savers also can now be appreciated. Interest rate differentials clearly are important to the flow of both savings and mortgage funds into California savings institutions and into real estate construction, mortgage, and sales markets. Since financing is known to have a significant influence on the volume of construction, out-of-state funds will have to be a continuing prop for California construction. The impact of specialization in mortgage lending on the flows of mortgage funds is not fully appreciated. Flows of savings to institutional lenders do not always match the demands on these lenders for mortgage funds. As residential construction revives, savings and loans associations will have the greatest need for mortgage funds. As nonresidential construction becomes dominant, insurance companies and commercial banks will become important as sources of mortgage funds. As the sales of single-family homes and apartment buildings increase, savings and loan associations again become important mortgage funds sources.