The Effects of Mortgage Availability on the Real Estate Resales on Oahu, State of Hawaii in 1973

Abstract

In the latter months of 1973 it was common knowledge in Honolulu that used housing sales were slackening considerably from the high levels in the first half of the year. During the months of September and October, the prime interest rate at commercial banks (the rate commercials banks give to their best customers for short-term loans) was heading toward record high levels of over 10%. Residential mortgage loan activity apparently was being rapidly curtailed by institutional lenders in the second half of 1973. Many felt that this apparent reduction in mortgage loan availability was largely responsible for the reduction in the number of used housing sales. However, no one could say just how much of a decline had actually taken place in housing resales and the mortgage market. The purpose of this paper is to determine if there was a decline in residential resales in 1973.