The Federal Reserve just released the Beige Book which provides anecdotal commentary on the economy nationally and across the regions of its member banks.
Here’s real estate and mortgage excerpts from the overall report. The macro take away is the pace of economic decline has “begun to stabilize” or “moderated.”
>Residential real estate markets stayed soft in most Districts, although many noted some signs of improvement.
Real Estate and Construction
>Residential real estate markets in most Districts remained weak, but many reported signs of improvement. The Minneapolis and San Francisco Districts cited large increases in home sales compared with 2008 levels, and other Districts reported rising sales in some submarkets. Of the areas that continued to experience year–over–year sales declines, all except St Louis–where sales were down steeply– also reported that the pace of decline was moderating. In general, the low end of the market, especially entry-level homes, continued to perform relatively well; contacts in the New York, Kansas City, and Dallas Districts attributed this relative strength, at least in part, to the first–time homebuyer tax credit. Condo sales were still far below year–before levels according to the Boston and New York reports. In general, home prices continued to decline in most markets, although a number of Districts saw possible signs of stabilization. The Boston, Atlanta, and Chicago Districts mentioned that the increasing number of foreclosure sales was exerting downward pressure on home prices. Residential construction reportedly remains quite slow, with the Chicago, Cleveland, and Kansas City Districts noting that financing is difficult.
Banking and Finance
>In most reporting Districts, overall lending activity was stable or weakened further for most loan categories. In contrast, Philadelphia reported a slight increase in business, consumer, and residential real estate lending. As businesses remained pessimistic and reluctant to borrow, demand for commercial and industrial loans continued to fall or stay weak in the New York, Richmond, St. Louis, Kansas City, Dallas, and San Francisco Districts. Consumer loan demand decreased in New York, St. Louis, Kansas City, and San Francisco, stabilized at a low level in Chicago and Dallas, and was steady to up in Cleveland.
>Residential real estate lending decreased in New York, Richmond, and St. Louis. Dallas reported steady but low outstanding mortgage volumes, while Kansas City noted that the rise in mortgage loans slowed. Refinancing activity fell dramatically in Richmond, decreased in New York and Cleveland, and maintained its pace in Dallas. Bankers in the New York District indicated no change in delinquency rates in all loan categories except residential mortgages, while Cleveland, Atlanta, and San Francisco reported rising delinquencies on loans linked to real estate.
>Banks continued to tighten credit standards in the New York, Philadelphia, Richmond, Chicago, Kansas City, Dallas, and San Francisco Districts; and some have stepped up the requirements for the commercial real estate category, in particular, due to concern over declining loan quality. Meanwhile, Cleveland and Atlanta reported that higher credit standards remained in place, with no change expected in the near term. Credit quality deteriorated in Philadelphia, Cleveland, Kansas City, and San Francisco, while loan quality exceeded expectations in Chicago and remained steady in Richmond.
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Deja VI all over again. Haven’t the FEB guys been reading Yuan’s reports?
See, the “green shoots” crowd were really reporting observations of cheat grass. Its still about jobs guys, and I’m told we need to retrain our blue collar work force (the backbone of the country) to do something else other than what other countries do better (i.e. cheaper). So far we are inventing and pushing the “green” industries and repair of infrastructure. The rubber has hit the road and the wheels came off. We never thought about the ridiculous situation we are experiencing in which almost anything we can think of for our workers to do can be done cheaper somewhere else. Well Ross Perot actually did talk about a “huge sucking sound” back when he was coming and going in the Presidential campaign, but he sort of functioned in the role of the libertarian boy who cried “wolf.”
I read a concession by some author who was extolling the progress the “free economy” has brought to the world apparently because it expands the number of goods and services. He said, “There are winners and losers, but mostly winners.” So, I guess the US jobless are the losers. Better luck next go round guys, when there is one.
Maybe I’ve got myopia, but I can’t see the light at the end of the tunnel even though I must continue to believe it is there.
Do you suppose if the whole country filed bankruptcy the court could conger up a fix?
That would be Deja vu, FRB and Yun in the first line. I’m now grouping my errors for efficiency. I can’t correct them now, so read it like I meant it to be.
Banks continued to tighten credit standards in the New York, Philadelphia, Richmond, Chicago, Kansas City, Dallas, and San Francisco Districts; and some have stepped up the requirements for the commercial real estate category, in particular, due to concern over declining loan quality.
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