Beige Book: Modest Growth Continues, but Some Optimism Emerges for Residential Real Estate


The latest issue  of the Federal Reserve’s Beige Book portrayed modest economic growth across all 12 Fed Districts. This particular theme of “modest” or “moderate” growth has been for most districts in each of the past several releases. Consumer spending, outside of some seasonal items hurt by low snowfall totals, remained solid during January and early February. Major winter tourist stops have struggled somewhat as a direct result of subpar snowfall amounts, but tourism activity in general was reported as strong in several areas. Manufacturing remained one of the economy’s strongest performing sectors thanks to expanding auto and tech equipment production, as well as solid gains in capital equipment demand; however, manufacturers in Fed Districts within the Northeast and Midwest noted some concern for export demand stemming from the ongoing fiscal crises in Europe.

Increased multifamily/rental property demand has been a key driver behind most of the reported improvements in real estate activity found in recent Beige Book releases. While participants in several districts continued to emphasize the contribution of multifamily demand, reports from several Fed Districts pointed to some new-found optimism for the single-family market.

Residential real estate activity increased modestly in most Districts. Boston, Cleveland, Richmond, Atlanta, Kansas City, and Dallas reported growth in home sales, while New York noted steady to slightly softer home sales. Philadelphia reported strong residential real estate activity. In contrast, home sales declined in St. Louis and San Francisco noted that home demand persisted at low levels. Contacts’ outlooks on home sales growth were mostly optimistic. Contacts in Boston, Philadelphia, Atlanta, and Dallas expect home sales to rise further.

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