For the reporting period of mid-May through June, the Federal Reserve reported in its July 2015 Beige Book released Tuesday that economic activity had expanded in all 12 Fed districts – and that real estate reports were positive in most markets.
Economic activity grew at a modest pace in the New York, Philadelphia, and Kansas City since the previous Fed Beige Book report issued in early June, and expanded at a moderate pace in Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco, according to the Fed. The Fed's contacts in Boston, Philadelphia, Atlanta, Kansas City, and Dallas reported optimism toward future growth.
The reporting period saw increased home sales in most districts; sales were mixed in Philadelphia and Dallas, while they declined in New York. Despite mixed reports on both home sales and buyer traffic in the Dallas district, the Fed said outlooks were "unanimously positive."
"Contacts noting slower activity mostly attributed it to wet weather across much of the state," the Fed wrote in the report. "Lot deliveries and new home starts have been significantly delayed due to the rains, resulting in large backlogs and prompting a few builders to limit sales. Contacts expect to see a surge in starts in the second half."
In Philadelphia, homebuilders reported little or no change in activity since the previous Beige Book report six weeks earlier.
"Contacts reported that economic and financial conditions remained challenging for contract signings on new homes," the Fed wrote. "Activity remained inconsistent through the current time period. However, surviving smaller builders are generally meeting their plans and expect this year to be as good as, if not better than, last year."
Most districts reported appreciation in home prices, and real estate lending increased in half of the districts since the previous Beige Book report. Mortgage loans increased on a seasonal basis in Cleveland, while real estate lending remained flat in Philadelphia and increased in the St. Louis district. In Atlanta, mortgage refinancing increased, but remained steady in Chicago, according to the Fed.
"Almost all of our contacts noted a seasonal increase in their residential mortgage business, which was heavily weighted toward new-home purchases," the Fed wrote. "The rapid rise in rental rates was cited as a motivating factor to purchase homes. Little change was reported in delinquencies (already at low levels) and loan-application standards."
Click here to see the entire July 2015 Beige Book.