Abstract

California, the "hottest" housing and mortgage market in the 1950s and early 1960s on a state-by-state basis, seems to have lost its prominent position. The article examines, how much the market has cooled off in comparison to residential building and mortgage investment throughout the United States. The article also sketches the principal factors that have contributed to the lower relative standing of California in the two markets under review. Residential construction and mortgage lending in California have declined relative to the nation as the state's economic growth slowed down and in-migration of people diminished. The decline, quite steep in the second half of the 1960s, was followed by an improvement in the early years of the current decade on most yardsticks of activity. This suggests that adjustments in California housing and mortgage markets to the new demographic and economic conditions have largely been completed. Since 1970 the state has accounted for 13 percent of total housing starts, and about 16 percent of aggregate net mortgage landing by all savings and loan associations and all commercial banks.