But here's our critical problem

Home buyers can't and won't pay $2,000 to $3,000 extra to get these things they want on top of paying a $2,000 to $3,000 price increase for which they get nothing at all. Cost inflation is the biggest reason new house sales are off while used house sales are up. (For nareb report see News index, p. 37)

In the past two years, while the cost of living has actually declined .1% . . .

1. Land prices have been so inflated

by the sudden shortage of developed land that it often costs the 1956 builder $1,000 a small lot more for land that is not a penny better.

2. Money costs more to borrow, so it

often costs the 1956 builder $1,000 a house in fees and discounts just to borrow the same amount of 4½ % money.

3. Our wages have been boosted twice without an equal increase in productivity, so the 1956 builder must often pay $200-$300 more for labor to get the same house built.

4. Building material prices are up

9.2%, so once again the 1956 builder must often pay $500 extra to get no more.

It is high time to stop worrying so much about our market . . . and start worrying a lot more about our costs

That's the real problem for everyone concerned with the design, construction, financing, supplying and selling of houses. All over the country builders' profits margins are being squeezed because home buyers are refusing to pay more unless they get more.

Today the American public has the money to afford a very much higher standard of housing too, but it will continue to spend its money for television instead of bathrooms, for cars instead of houses, until we get our costs in hand.