Fed Finds Positives in ‘Fragile’ Housing Recovery

The Federal Reserve noted real estate market improvements throughout its 12 districts, a rare burst of optimism for the housing sector from the central bank’s “Beige Book” economic summaries.
Reports received by the districts from businesses and other contacts provide the basis for the observations in the Beige Book, which has been generally glum in the areas of real estate and construction.
But not so in today’s analysis, which is based on feedback received on or before May 25, 2012.
“Activity in residential real estate markets improved in most districts since the previous report. Several Districts noted consistent indications of recovery in the single-family housing market, although the recovery was characterized as fragile,” the Fed reported.
The apartment market continued to improve, and multifamily construction increased in several districts.
Home sales were above year-ago levels in most areas of the country, the Fed said. While several districts noted sales had improved since the previous report, some noted that the pace was well below the historical average.
The New York, Cleveland, and Richmond districts reported “a pickup in the pace of distressed sales.”
Residential brokers and some builders in the Philadelphia, Atlanta, and Dallas districts said home sales were exceeding expectations.
However, this sluggish housing market recovery is still lagging, so not all of the report was positive, especially with some stagnant home prices.
“Overall, home prices remained unchanged in many districts, although reports were mixed,” the Fed said. “There were a few reports that sellers were lowering asking prices, leading to downward pressure on housing prices.”

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