Wednesday, July 18, 2012

KC Fed: Local economy 'expanded moderately'

The Federal Reserve system released its Beige Book on economic conditions today. The Kansas City Fed District, which includes Colorado, reported moderate growth and noted rising prices in residential and commercial real estate.

According to the report:

Commercial and residential real estate prices rose with stronger sales, and District contacts were optimistic regarding future sales and construction activity. Led by mortgage loan activity, some District banks reported improvements in loan demand and quality.

Also: 

In the recent survey period, some District bankers reported modest improvements in loan demand and loan quality with little change in deposit levels. In general, loan demand rose moderately, led by gains in residential mortgage loans and slight upticks in both commercial real estate and agricultural loan demand.

Growth in real estate prices continued:

Stronger residential home sales reduced home inventories and commercial construction activity grew in June. A sharp increase in home sales reduced home inventories, particularly for low- and mid-priced houses. Stronger sales supported a moderate increase in home prices and real estate contacts expected additional sales and price gains during the next three months. Residential mortgage lenders saw an upswing in loan applications for home purchases while home loan refinancing activity was stable. Sales at construction supply firms remained solid and some building materials were in short supply. Builders, however, reported a lull in new home starts following the spring construction rush, but building activity was expected to pick up during the next three months.