Economic activity continued to improve at a modest pace across the twelve Federal Districts reporting in today’s release of the Beige Book from the Federal Reserve. (Read >here.) Real estate is improving, gradually, and in the residential space, sales made before the April deadline for the homebuyer tax credit “buoyed” the market. “Commercial real estate remained weak, although some districts reported an increase in leasing,” the report adds. The district of New York reported that underwriting and investment banking activity strengthened since the last Beige book. Overall consumer lending is down, but real estate lending increased despite tighter underwriting standards. The book states that the secondary market for residential mortgages is beginning to improve in Chicago. Private equity investment in commercial properties increased in Boston, Chicago, and Dallas. Loan quality was indicated to be stabilizing or gradually improving in most districts, but “remained an issue” for banks with large exposures to real estate. New England also experienced large gains in residential real estate. Home sales increased year-over-year, ranging from a 26% increase in Rhode Island to a 63% increase in Maine. Realtors in New York report sales activity is up 20%. In contrast, the sales pace slowed in Philadelphia. In DC, the inventory of unsold houses continues to decline, with luxury houses showing competition between potential buyers. Agents there said that concern that interest rates would rise once the homebuyer tax credit expired motivated purchase agreements. In Kansas City, however, the number of unsold houses is rising. “There is no consensus among respondents about how markets will perform after June,” reports the Federal Reserve, “although some cite anecdotal evidence of continued activity after April 30 and most think that low interest rates and fairly low prices will continue to make the market attractive for prospective buyers.” Write to Jacob Gaffney. Disclosure: the author holds no relevant investments.