Fed Reports Expanding Real Estate Market in All 12 Districts

Fed Reports Expanding Real Estate Market in All 12 DistrictsReal estate activity expanded in all 12 of the Federal Reserve’s districts in one of the more positive housing market updates from the central bank in the aftermath of the Great Recession.
Eight times a year, the Fed gathers updates on economic conditions from bank and branch directors, who relay data from business contacts and market experts.
The reports are referred to as the Beige Book. The 12 districts cover all regions of the United States. The Atlanta district, for example, covers the Southeast.
In Wednesday’s update, the Fed reported that “existing residential real estate activity expanded in all districts that reported; growth rates were described as moderate or strong in nine districts.”
In addition, all districts reporting on price levels saw increases, although New York and Chicago reported only very minor increases.
The five districts that reported on housing inventories all reported falling levels.
“New residential construction (including repairs) expanded in all but one district,” the Fed reported.
Overall, the Fed branches reported that economic growth expanded in all districts, with a pace of growth described as either modest or moderate.
Concerns over “fiscal uncertainty” in Washington caused consumers to spend cautiously, with retail contacts and auto dealers reporting “a slightly dimmer, though positive, outlook for future sales.”
More highlights from the Beige Book:
Consumer Spending
Consumer spending increased to some degree in all 12  districts. Across the nation, holiday sales grew modestly compared with last year but came in below expectations in the New York, Cleveland, Atlanta, Chicago, and San Francisco Districts. Boston reported continued strong demand for clothing, shoes, and furniture, and San Francisco reported robust online sales.
Auto Sales
Reports of auto sales were steady to stronger in ten Districts. Richmond, Atlanta, and San Francisco noted strong sales. New York and Dallas cited mixed sales that were generally positive, while auto sales in Kansas City slowed but remained higher than a year ago. Some dealers in the Chicago and Kansas City districts reported high levels of inventory. Contacts in Philadelphia, Cleveland, Kansas City, and Dallas expect consumers to react to ongoing fiscal uncertainty, thus dimming a positive outlook for future sales.
Banking and Finance
Overall, loan demand was largely unchanged in the Philadelphia, Cleveland, Richmond, Kansas City, and San Francisco Districts, with most of these Districts reporting a continuation of slight to moderate growth in total volume. The New York, Atlanta, Chicago, and Dallas districts reported stronger demand than previously, while the St. Louis District reported a slight decline. Some increased lending in Philadelphia, Chicago, and Dallas was driven by businesses taking out loans for special year-end purposes such as tax planning and dividend payments.
The Fed’s 12 districts cover all 50 states, with Federal Reserve Banks headquartered in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis Kansas City, Dallas, and San Francisco. Alaska and Hawaii fall under the San Francisco district.

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