Mortgage, Auto Lending Help Drive Economic Growth, Fed Reports

Mortgage, Auto Lending Help Drive Economic Growth, Fed ReportsThe housing market overall and loan demand for homes and autos are helping bolster a mostly moderate economic expansion across the Federal Reserve’s 12 districts, according to the Fed’s Beige Book update.
Real estate was a primary driver of expansion, according to feedback received on or before April 5 from businesses and other central bank contacts.
Overall, automobile sales also remained strong or increased moderately since the last report.
But it was the rebounding housing market that mostly dominated the positive news in the latest Beige Book released Wednesday.
Tight housing inventories and strong sales led to rising home prices in many Districts, including Atlanta, Minneapolis, Kansas City, Dallas, and San Francisco.
“Most Districts said residential and commercial real estate improved markedly since the last report,” the Fed reported. “Home prices were rising in many areas of the country. Loan demand was steady to slightly up in most Districts.
Residential real estate activity continued to improve in most Districts. In some, including Cleveland, Richmond, Chicago, Minneapolis, Kansas City, Dallas, and San Francisco, there was “increased momentum since the last report.”
The New York District, in particular, cited especially strong improvement in residential real estate — both in housing and apartment markets.
Home sales continued to rise in most Districts.
Although homebuyer demand was high in the Boston District, low home inventories were restraining sales, keeping growth modest. Home sales were reportedly strong in both the Atlanta and Dallas Districts. The Richmond District reported that low inventories were pushing up contracts to well above listing prices. While the Boston and New York Districts said multiple bids on properties have become more common.
Within the New York District, condo sales volumes strengthened and low inventories have begun to drive up selling prices in New York City and surrounding areas. In New Jersey, home prices were rising modestly and inventories were shrinking with a marked reduction in the number of distressed properties. Contacts in the Boston District also cited a decline in the stock of distressed properties.
Reports on mortgage lending were mostly favorable. Stronger refinancing activity was cited by the New York and Atlanta Districts. The Cleveland and Kansas City Districts reported a shift from mortgage refinancing to new purchases, and the New York, Richmond, Dallas, and San Francisco Districts reported an uptick in residential mortgage loans.
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.

Leave a Reply

Your email address will not be published. Required fields are marked *