The Tenth District economy expanded at a faster pace in late February and March. Consumer spending improved, residential real estate activity rose solidly, and commercial real estate activity edged higher.
Real Estate and Construction
Residential and commercial real estate activity increased in late February and March, and expectations were solid heading forward. Housing starts edged slightly higher, with several contacts in Nebraska noting increased demand due to the booming agricultural industry. Expectations for future homebuilding remained positive, and building materials were generally available. Sales at construction supply firms were stable, with some contacts noting increased business among multi-family and remodeling contractors, and expectations for future activity were favorable. Home sales rose markedly from the previous survey period and inventory levels fell, which contacts attributed to seasonal patterns, favorable weather, lower interest rates, and newfound optimism in the overall economy. Expectations for future home sales continued to strengthen, and home price levels improved slightly. Mortgage lending activity was positive and remained above year-ago levels, though contacts expected refinancing volume to slow somewhat as rates begin to rise. Commercial real estate activity continued to edge higher, and expectations for future sales were mostly positive. Vacancy rates dropped and were expected to fall further. Office prices and rents remained subdued but were slightly higher than a year ago, and expectations were largely flat. Several commercial real estate contacts in Oklahoma noted strong sales due to heavy activity in the energy industry, while a contact in Missouri expressed continued financing difficulties.
Bankers generally reported steady or stronger loan demand, stable or improved loan quality, and increased deposits. Overall loan demand was steady or improved. Most respondents reported stable to increased loan demand for residential real estate loans, while loan demand for commercial and industrial loans and commercial real estate loans remained steady. Loan demand was stable to weaker for consumer installment loans. Credit standards remained largely unchanged in all major loan categories, and the majority of respondents continued to report increased deposits. Most bankers reported stable or improved loan quality compared to a year ago, and every banker respondent believed the outlook for loan quality over the next six months would be steady or improving.
Wednesday, April 11, 2012
KC Fed: 10th District economy "expanded at a faster pace" in late Feb and March 2012
The Federal Reserve System released its March Beige Book today. According to the Beige Book for the Kansas City Fed, which includes Colorado within its district: