In the Federal Reserve's latest Beige Book released on Wednesday, residential real estate activity was reported to be "steady to improving" across most of the Fed's 12 districts for mid-February through the end of March despite a minor slowdown in construction due to winter weather.
The districts of Richmond, Chicago, and Dallas reported that residential mortgage demand, particularly in the area of refinancings, grew during the period, while New York reported steady growth. Delinquencies were down or at low levels in New York and Cleveland, while Philadelphia and Kansas City bankers expressed confidence in the quality of their loan portfolios, according to the Fed.
Most Fed districts reported improvement in residential real estate, namely Cleveland, Richmond, Chicago, Minneapolis, Kansas City, Dallas, and San Francisco. The remaining districts reported steady residential real estate activity, except for New York, which said conditions were softening. Construction activity slowed in Philadelphia, Cleveland, Atlanta, and Dallas due to harsh winter weather conditions.
Half of the districts reported low-to-declining levels of inventory, while housing inventory was near historic lows in the Chicago district – particularly for homes in the lower price range. Most of the districts reported that the real estate supply was tight in most price points. In Philadelphia and Cleveland, mid- to high-priced homes were selling better, while low- to mid-ranged priced homes outsold homes in other price ranges in the Chicago, Kansas City, and Dallas districts. First-time homebuyers were absent in Philadelphia and Cleveland, according to the Fed.
With winter over, most Fed districts remained hopeful with regards to home sales for the rest of the year.
"Contacts across the system uniformly reported that they were optimistic and many expect a greater than normal upswing in home sales with the coming of spring," the Fed wrote in the report.
Labor markets remained stable or showed modest improvement in most districts, with hiring increases reported in New York, Richmond, Atlanta, Chicago, St. Louis, and Dallas.