One Bright Sign

Savings and loan associations normally lend more than half of the mortgage money that home buyers use to purchase houses, but this year they have had little cash to hand out. From April through September, the S and Ls lost almost $2.8 billion in deposits as savers withdrew their funds to seek higher interest rates elsewhere. Now, though, the Federal Reserve has eased its credit squeeze, interest rates on competing investments are coming down, and in October the S and Ls took in an estimated $650 million of new savings. The inflow will have to continue for several more months before the S and Ls rebuild their reserves enough to advance mortgage money liberally again, but the October inflow is nonetheless about the only good news that would-be home buyers have received in months.

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