Overall economic activity continued to expand at a modest to moderate pace in January and early February, although the housing and financial markets outlook was muted, according to the Federal Reserve’s Beige Book. Some of the 12 Fed districts across the nation reported a slight increase in the level of residential real estate activity, although all districts maintained that the overall level of home sales and construction remained low. The report is generally similar to improving reports from the first Beige Book of 2011 that also noted a weak housing market. Reports on home prices were mixed. Atlanta and Kansas City observed persistent downward price pressure. Home prices continued to fall according to Philadelphia reports, but mainly at the high-end of the market. Cleveland and Chicago contacts described prices as little changed. The outlook for residential sales and construction improved marginally, although activity is expected to remain at low levels. Kansas City contacts anticipate a seasonal surge in sales activity this spring. Atlanta, Dallas and San Francisco also expect modest improvement, while little to no sales growth is expected among Philadelphia contacts. A slight uptick is expected in Chicago and San Francisco construction. Several districts indicated improvements in commercial real estate sales and leasing activity, including Boston, Richmond, Chicago, Kansas City, Dallas and San Francisco. But most reports characterized nonresidential construction as weak. Reports from banking contacts indicated that loan demand was up somewhat compared with prior reporting periods. Although businesses remained cautious in regard to their capital spending plans, demand for commercial and industrial loans rose a bit. Demand for consumer credit grew modestly as well. A few reports indicated lenders' willingness to extend credit to small and medium- sized businesses improved in recent weeks. Nonetheless, lending standards for consumer and business lending remained relatively restrictive. Dallas indicated steady to improving credit quality, and New York reported steady to lower delinquency rates. Retail sales increased in all districts, except Richmond and Atlanta, although Boston, New York, Philadelphia, Atlanta and Kansas City noted that severe snowstorms had a negative impact on merchant activity. Tourism improved in Richmond, Atlanta and San Francisco, while New York and Kansas City noted a slowdown in activity as hotel occupancy rates declined. All districts, except St. Louis, experienced solid growth in manufacturing production, the Beige Book said. The Beige Book gathers anecdotal evidence of economic conditions in the dozen Fed districts nationwide. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.