Fed PolicyMortgage

Beige Book: Housing ready for spring home buying

However, there are still small pockets of concern

A majority of the twelve Federal Reserve Districts continued to record growth in the latest Beige Book, with positive results ranging anywhere from steady to modest growth.

Although there was some slowing in housing starts due to abnormal seasonal patterns owing to the harsh weather, residential real estate activity was steady to improving across most Districts.

The only city to report softening conditions in residential real estate activity was New York. Meanwhile, activity improved in the Cleveland, Richmond, Chicago, Minneapolis, Kansas City, Dallas and San Francisco Districts and remained steady in all others.

The majority of districts reported a tight supply of residential real estate in most price points of the market.

On the other side of the housing spectrum, residential mortgage demand — particularly for refinancings — grew in Richmond, Chicago and Dallas and was steady in New York. Home equity line volumes fell in Philadelphia and Cleveland.

Here are the reports broken up regionally:


Closed sales of single-family homes in February (reflecting sales under contract 30 to 60 days prior) increased year-over-year in Rhode Island, Maine, Connecticut, and Vermont, but declined in Massachusetts and New Hampshire.

Contacts expect the spring market to be strong, although starting later this year owing to the harsh weather. Respondents anticipate that new listings will rise after owners repair winter damage and express hope that low interest rates continue to bring buyers to the market.

New York

The District’s housing markets have been a bit softer, on balance, since the last report. New York City’s apartment rental market has been steady to slightly stronger in recent weeks: rents have continued to edge higher in Manhattan and Queens and are up moderately from a year earlier, while rents in Brooklyn have been flat.

Housing markets in areas around New York City have been generally flat. Selling prices were flat to up slightly; one New Jersey contact partly attributes the sluggish recovery in housing to a persistently high backlog of foreclosed homes.


Third District homebuilders reported that winter weather slowed some work in progress and delayed some starts, but that traffic, inquiries, and contract signings showed improvements at times during February and March. Overall, conditions remained mixed with little overall growth. Homebuilders continued to report an absence of first-time homebuyers; most sales were made to higher-income, moveup buyers. Builders are still expecting a little growth in 2015.


Year-to-date sales through February of new and existing single-family homes rose 3 percent compared to the same time period in 2014. The average sales price was about 6 percent higher. Construction starts were down slightly. Homebuilders reported that business traditionally begins to pick up late in the first quarter, and March sales matched their expectations. New-home contracts were concentrated in the move-up price-point categories; prices increased recently due to higher land and labor costs and lower existing-home inventory


Loan demand rose modestly since our previous Beige Book. Residential mortgage demand increased in Maryland, South Carolina, and Virginia. Growth in residential mortgage lending in Maryland and Virginia was largely attributed to increased refinancing activity.

Activity in residential real estate continued to increase modestly since our prior Beige Book. Sales increased in Washington, D.C., North Carolina, and South Carolina.


Since the last report, District brokers continued to note improvements in existing home sales activity. Many contacts reported that home sales were flat to up slightly compared with the year earlier level, although some brokers found that sales were weaker than expected due to the weather. The majority of brokers indicated that inventory levels had fallen from the prior year's level and noted that buyer traffic was flat to slightly up compared with a year earlier. Brokers continued to cite modest home price appreciation. They also expect home sales to increase over the next three months.


Construction and real estate activity increased modestly in March. Demand for residential construction grew slightly, with contacts reporting some new development in suburban areas. Sales of single-family homes also picked up, and contacts expected that buyer demand would continue to improve throughout the year. Home prices increased, residential rents held steady, and housing inventories remained near historic lows, particularly for the bottom end of the market.

St. Louis

Residential activity continues to improve in most parts of the District. Home sales increased in the Eighth District on a year-over-year basis. Compared with the same period in 2014, February monthly home sales were up 13 percent in Little Rock, 15 percent in St. Louis, and just under 1 percent in Louisville. Monthly home sales declined 6.5 percent in Memphis compared with one year ago. Residential construction in February decreased in the majority of the District’s metro areas on a year-over-year basis.


Residential real estate activity increased. In the Sioux Falls area, February home sales were up 6 percent, inventory increased 8 percent, and the median sales price increased 12 percent relative to a year earlier. Western Wisconsin home sales increased 7 percent in February from a year earlier, and the median sales price rose 6 percent. Minnesota home sales were down 1 percent in February from a year earlier, the inventory of homes for sale increased 4 percent, and the median sales price rose 13 percent.

Kansas City

Real estate activity increased at a modest pace in March as both residential and commercial real estate markets expanded. Residential real estate sales increased moderately over the previous survey period and were above year-ago levels, with low- and medium-priced homes continuing to outpace sales of higher-priced homes. Home prices continued to make strong gains as inventories fell. Expectations for sales and prices were strong, and inventories were expected to decline further. Residential construction activity moved up as housing starts, traffic of potential buyers and prices increased in March over the previous survey period.


Housing activity generally remained solid, and outlooks for the remainder of the year were positive. Home sales continued to rise, but reports on the pace of growth were mixed. Contacts in Dallas Fort Worth reported weather-related weakness in the earlier part of the reporting period but said sales picked up in the latter half. Respondents in Houston noted continued strength in sales at lower price points, but noted softening in sales activity at the higher price points.

San Francisco

Real estate activity advanced during the reporting period. Multi-family residential construction activity is robust in many areas, although a shortage of skilled labor in selected regions is damping the pace slightly. Several contacts reported that although the pace of single-family construction remained slower than that of multi-family, single-family construction picked up. Low inventories of single-family homes limited the pace of sales in some areas. A few contacts also cited stringent mortgage qualification requirements as an impediment to home purchases. Nevertheless, the pace of sales of single-family homes increased notably in some areas, with multiple offers and few days on the market. Many contacts reported heavy commercial construction activity.

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