The economy grew at a modest level in January, according to the Federal Reserve’s Beige Book report on Wednesday. Retail sales and manufacturing increased at a moderate level, and home construction and home sales saw moderate growth in most of the 12 districts.
Rising economic activity did not seem to affect the housing market much, as some districts report little to no change in home prices during the month. The Dallas and San Francisco districts reported steady but strong home prices. Dallas reports a strong labor market with increasing wages, alongside several other districts.
The New York district reported low or stagnant real estate markets, but in suburban areas such as around New York City, home sales picked up during January. Upstate New York experienced some strong sales activity and rising prices within a tight inventory.
Although the Minneapolis district had a relatively weak month in commercial real estate, particularly in commercial construction, the residential real estate market picked up a little. Residential construction in Minneapolis-St. Paul and Sioux Falls saw significant improvement over last year, and Fargo additionally saw a slight increase.
Sales as a whole were down in the Boston area, but despite this, optimism going into 2017 is “overwhelming", according to Beige Book contact from Boston. In the Boston district, Maine saw a record number of home sales, and Rhode Island saw record numbers for the month of December. Pending sales in the district were also up. A Beige Book contact in Rhode Island noted that as prices rise, more people will see gains in home equity which will give them more freedom to move”.
Overall, the Beige Book reports that home prices are on a steady rise in most districts, though several districts note low inventories of existing homes. Lending activity stayed steady for the most part, with some slight increases. Businesses generally are to the rest of the year optimistically.
Read the entire Federal Reserve Beige Book for March here.