South Salem NY Real Estate | Fed Sees Few Gains in Housing Market

The U.S. housing market remains anemic, with little change seen in the early weeks of summer, the Federal Reserve reported today in its most recent snapshot of the nation’s economy.

Residential real estate sales throughout the nation were largely unchanged from late spring, according to the Fed’s latest Beige Book report on the nation’s economy, released today. Most of the nation’s 12 Federal Reserve Districts reported that home prices were flat or declining in the most recent six-week period, although the Minneapolis, Richmond (Va.) and Atlanta districts reported increased sales activity.

Residential construction activity increased in the Minneapolis District during the current reporting period, but otherwise remained flat or down in the rest of the nation. At the same time, construction and other activity in the rental residential market was generally up across most of the nation, as economic uncertainty, tight credit and foreclosures continue to push more Americans toward rental housing.

There were a few positive trends in residential real estate, but they tended to be weak and scattered about the nation. Sources in many parts of the country reported increasing foot traffic by potential home buyers, but this has not yet translated into increased sales.

In the Boston District, reports from some states indicated sales were running higher than two years ago, which was seen as encouraging – sales last year are widely regarded as artificially inflated by the homebuyer tax credit. Sources in the district generally expect to see weak sales for the rest of the year, with no significant increase in home sales until 2012.

Sales activity was up in the Richmond District, which contains the Washington, D.C. area, which has been the nation’s best-performing real estate market over the past year, according to various reports. Most of the sales increases were among low- to mid-priced homes, although some areas also reported increased activity at the high-end of the market, with a low inventory of such properties in the D.C. area.

In the southeast, sales activity were up slightly over last year’s levels in the Atlanta District, driven primarily by increased sales in Florida, which has been one of the nation’s hardest-hit housing markets since the downturn. Sales in the Kansas City District remained flat, although with increased demand for entry-level and high-end homes in some Colorado mountain resort areas, possibly due to investors positioning themselves for a rebound.

Otherwise, the Fed reported that overall economic activity continued to grow at a moderate pace, although with the rate slowing in the eastern part of the nation during the six-week reporting period. Consumer spending and manufacturing were up overall, although labor conditions remained soft, with little gains in either employment or wages.

Officially titled the “Summary of Economic Conditions” the Fed’s Beige Book is released eight times a year and reports on overall economic conditions across the nation and in the 12 Federal Reserve Districts.