Fed Districts Report Modest-to-Moderate Economic Progress
Reports on residential housing markets remained largely positive across the country as the economy continued to expand at a modest-to-moderate pace in June and early July, the Federal Reserve reported in its latest Beige Book released July 18.
Economic activity in Cleveland, New York and Philadelphia continued to expand, but at a slower pace compared to the previous report, while Richmond cited mixed activity. Boston, Chicago, Dallas, Kansas City and Minneapolis described activity as advancing at a moderate pace, with Atlanta, San Francisco and St. Louis reporting modest growth.
The reported noted that home prices are stabilizing in some markets and price increases were noted in select markets. However, both Atlanta and Boston noted that appraisals were coming in below market prices.
Home sales increased in Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, San Francisco and St. Louis. However, reports on sales were mixed in New York; gains in Boston eased from earlier in the year; and Philadelphia described new home sales as disappointing.
Most districts reported that rental markets were continuing to strengthen. Atlanta, Boston, Chicago, Dallas and New York cited increases in apartment rents. Multifamily construction was described as “strong” in Atlanta, Chicago and San Francisco; Dallas indicated that apartment construction likely will increase over the next several months.
Reports on commercial real estate markets were mixed among the districts. Atlanta, Boston and St. Louis indicated modest improvements in commercial real estate, while San Francisco reported strengthened demand. Dallas and Philadelphia reported that demand was relatively steady from the previous report; New York and Richmond indicated that conditions softened.
Both Kansas City and Minneapolis reported that nonresidential construction increased modestly, while Chicago reported an increase in demand. Boston indicated that commercial construction continued to gain momentum, with Cleveland reporting that activity was much improved from a year earlier. However, activity in Atlanta was flat year-over-year, while Richmond indicated that activity had softened over the past few months.
Most districts reported that demand for loans — particularly real estate loans — grew at a modest pace. Although Dallas indicated that demand for mortgage lending was especially strong, Cleveland and Richmond reported that activity was weaker. Chicago, Cleveland, New York and Richmond noted that mortgage loan refinancing was either steady or on the upswing, while Philadelphia indicated a slowdown. Both Dallas and Kansas City reported increases in agriculture and commercial real estate lending.