Nearly all twelve Federal Reserve districts reported modest to moderate growth in economic activity in the Fed's latest February Beige Book.
Residential real estate markets posted the strongest results, with impressive growth throughout nearly all the districts as home prices rose amid falling inventories across the country, the report said.
The Boston, Dallas, Kansas City, Minneapolis, San Francisco and St. Louis districts reported slight improvements.
Meanwhile, Philadelphia real estate continued to report low-end home prices as firm or rising or increasing slightly, while high-end home prices continued to fall.
Inventories also declined in nearly all districts, with Realtors in several districts concerned about the impact on future sales volume, the report noted.
Home construction increased in most districts, with the exception of the Kansas City District where it was reported as unchanged.
Additionally, several districts noted ongoing strength in multifamily construction. However, the Atlanta and Cleveland districts reported continued financing difficulties for builders.
Overall commercial real estate conditions were mixed or slightly improved in most districts, the book stated.
Commercial real estate activity grew modestly in the Atlanta, Philadelphia, Richmond, San Francisco and St. Louis districts. While Boston and New York reported mixed activity levels, Dallas and the Kansas City districts noted few changes.
Commercial construction improved by varying degrees in the Atlanta, Chicago, Kansas City, Minneapolis and St. Louis Districts.
However, the Boston district expressed concerns about overbuilding in the apartment market, while the Philadelphia district noted an increase in repair work resulting from Hurricane Sandy, according to the report.?
Furthermore, overall loan demand was stable or slightly higher across nearly all districts as several bankers noted stiff competition for qualified borrowers, the report said.
Residential real estate loan demand was strong in Atlanta, Chicago, Cleveland, Philadelphia and Richmond districts, mainly driven by refinances due to continued low interest rates.?
Meanwhile, the New York district indicated a decrease in loan spreads for all loan categories, particularly residential mortgages.
Additionally, bankers in the Chicago district said that very few mortgage originations were being kept on their balance sheets and interest rate swaps were being utilized to hedge against a potential rise in interest rates, according to the report.?
cmlynski@housingwire.com
Source: http://www.housingwire.com/news/2013/03/06/beige-book-real-estate-markets-strengthen
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