The Federal Reserve System released its February Beige Book yesterday. According to the Beige Book for the Kansas City Fed, which includes Colorado within its district:
Real Estate and Construction
Residential and commercial real estate activity picked up in January and early February. Existing home inventories declined as lower prices spurred a modest increase in sales, particularly for low- and mid-priced homes. Real estate contacts expected that a seasonal upswing in sales this spring would stabilize home prices in the coming months. Residential mortgage lenders reported an uptick in loans for home purchases and higher average loan amounts while home loan refinancing activity was expected to slow further. Residential lot prices fell further, and new home starts were on par with year-ago levels. Builders planned to ramp up construction in the coming months and sales rose at building supply firms. New commercial construction increased and was expected to rise further with more projects in the pipeline. Commercial real estate prices and rents dipped during the survey period but were expected to firm as vacancy rates improved. After edging up in January and early February, commercial real estate sales were expected to strengthen further during the next few months. Developers reported little change in access to credit.
In the recent survey period, bankers reported generally steady loan demand, slight improvements in loan quality, and a modest increase in deposits. Most respondents reported steady loan demand for commercial and industrial loans and commercial real estate loans. However, loan demand was slightly weaker for consumer installment loans and residential real estate loan demand softened with slower home mortgage refinancing activity. Bankers reported that interest rates on commercial and industrial loans declined further. Credit standards remained largely unchanged in all major loan categories, and most respondents reported stable or increased deposits. The majority of bankers reported improved loan quality compared with a year ago, and many bankers expected loan quality to improve further during the next six months.