The housing market showed broad improvement as the economy continued to expand modestly in late August and September, the Federal Reserve said Wednesday.
The Fed’s “beige book” report reinforced a host of recent data suggesting the housing market’s recovery is picking up steam. The report, which is based on anecdotes from business contacts and economists, said existing-home sales strengthened in all 12 Fed districts, while selling prices rose or held steady.
In general, the Fed noted that economic activity “generally expanded modestly” since its last report, with consumer spending inching up or staying level.
Some districts noted that uncertainty over the presidential election, the U.S. budget outlook and the European sovereign-debt crisis were keeping some employers from hiring.
The economic snapshot was prepared by the Federal Reserve Bank of New York based on information gathered on or before Sept. 28 and will be used for discussions at the Fed’s next policy meeting, Oct. 23 and 24.
The beige book observed that “residential real estate showed widespread improvement since the last report.” That is in line with data showing a nascent firming in a sector once rocked by the collapse in housing prices and the recession. Sales of previously occupied homes reached their highest level in more than two years in August, the National Association of Realtors said last month.
The Fed noted that shrinking inventories of houses helped push up prices in some districts. Some regions saw robust growth in the construction of multi-family units. The commercial real-estate market was “mixed,” with some softening in the office market.
At its policy meeting in September, the Fed took action to boost the housing market. The central bank launched a bond-buying program, under which it will purchase an additional $40 billion of mortgage-backed securities each month until the labor market significantly improves. The Fed opted to buy mortgage-backed securities to help put downward pressure on mortgage interest rates.
Some districts reported that retail sales were being held back by rising gasoline prices, political uncertainty and “concerns about the fiscal cliff.” That is a reference to the package of tax increases and spending cuts scheduled to simultaneously take effect at the start of 2013 unless Congress reaches a deal to avert them. Manufacturing conditions were mixed, but “somewhat improved,” while tourism remained steady at “robust levels.”
The Fed found price pressures were contained.