Loan demand and real estate activity levels improve: Beige Book
Loan demand in the banking industry, as well as residential and commercial real estate activity, improved in most Federal Reserve districts across the U.S., according to the latest Beige Book from the Fed.
The survey, which develops a consensus on economic activity by interviewing industry contacts in every Federal Reserve district, reported that the U.S. economy continued to grow at a modest pace from mid-February to late March.
Residential real estate activity also improved in most districts, with Cleveland and San Francisco remaining outliers with lackluster real estate activity.
Nationwide construction of multifamily housing units grew in most Fed districts, with most of the construction centered around apartments and senior housing.
Meanwhile, home prices continued to fall in key areas like Boston, New York and Minneapolis. Prices remained flat in San Francisco.
Mild winter weather during the first part of the year delivered a slight boost in real estate activity in the areas of Boston, Philadelphia and Kansas City.
Conditions in the financial services and banking industry remained "stable" as demand for lending increased modestly. While lending remained unchanged in St. Louis, it expanded in New York, Philadelphia, Cleveland, Richmond, Chicago, Kansas City, Dallas and San Francisco.
"In general, the demand for commercial and industrial loans remained steady, while several districts reported an increase in commercial real estate lending activity," the Beige Book said.
"The Philadelphia and Cleveland districts reported increased lending for multifamily housing and health care, and contacts in Richmond cited increased lending to small business to finance inventory and capital expenditures."
Overall, residential real estate showed signs of modest improvement and multifamily housing construction continued to grow. On the banking side, credit quality increased and financial firms noted improvement in loan demand.