U.S. Economic Activity Weak, Real Estate Market Not Faring Better
Wednesday, June 25, 2008
by Michael Peron
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Signs of "sluggish and weak" economic activity is sweeping the nation, leaving little promise for growth in the months of April and May, according to recent reports.
The Federal Reserve's Beige Book, released Wednesday, shows consumer spending taking a dive due to higher energy costs and the rise in food prices.
Real estate markets did not fare any better. Generally weak across the board, Boston, New York, Cleveland, St. Louis, and Dallas experienced a decline home sales. While prices saw a slight drop in Boston, Atlanta, Kansas City, Missouri, and San Francisco—Richmond, Virginia and Chicago home prices remained stable. Cities to maintain high or rising inventory levels of new and existing homes: New York, Philadelphia, Cleveland, Richmond, and San Francisco.
One of the biggest problems? Buyers unable to obtain financing, particularly in New York and Chicago districts. “Residential lending activity remained generally weak in Richmond, Atlanta, and Chicago. In contrast, demand picked up in Philadelphia, Cleveland, Kansas City, and Dallas, but was about the same in St. Louis,” the report said.
When it came to mortgage loan delinquencies, New York, Philadelphia, and Cleveland reported the highest increases—with contacts in New York, says the report, “indicating a notable rise in late payments for consumer loans.” Credit quality took a beating in San Francisco, with the silver lining of stabilization in Chicago and Dallas. According to the report, respondents in Kansas City and Dallas expect loan quality to “deteriorate going forward.”
All Federal Districts have indicated that they expect credit standards tightening on consumer, residential, and commercial loans.Jacqueline Gilbert
Editor's note: The Beige Book was prepared at the Federal Reserve Bank of Richmond, with information collected on or before June 2. To read the report in its entirety, click here.
The Federal Reserve's Beige Book, released Wednesday, shows consumer spending taking a dive due to higher energy costs and the rise in food prices.
Real estate markets did not fare any better. Generally weak across the board, Boston, New York, Cleveland, St. Louis, and Dallas experienced a decline home sales. While prices saw a slight drop in Boston, Atlanta, Kansas City, Missouri, and San Francisco—Richmond, Virginia and Chicago home prices remained stable. Cities to maintain high or rising inventory levels of new and existing homes: New York, Philadelphia, Cleveland, Richmond, and San Francisco.
One of the biggest problems? Buyers unable to obtain financing, particularly in New York and Chicago districts. “Residential lending activity remained generally weak in Richmond, Atlanta, and Chicago. In contrast, demand picked up in Philadelphia, Cleveland, Kansas City, and Dallas, but was about the same in St. Louis,” the report said.
When it came to mortgage loan delinquencies, New York, Philadelphia, and Cleveland reported the highest increases—with contacts in New York, says the report, “indicating a notable rise in late payments for consumer loans.” Credit quality took a beating in San Francisco, with the silver lining of stabilization in Chicago and Dallas. According to the report, respondents in Kansas City and Dallas expect loan quality to “deteriorate going forward.”
All Federal Districts have indicated that they expect credit standards tightening on consumer, residential, and commercial loans.Jacqueline Gilbert
Editor's note: The Beige Book was prepared at the Federal Reserve Bank of Richmond, with information collected on or before June 2. To read the report in its entirety, click here.
