Housing Recovery in Only Two Areas, Says Federal Reserve Report

Only two regions of the country showed any sign of a real estate recovery in July and August -- Cleveland and St. Louis. Otherwise, activity in residential real estate markets declined further, according to the Federal Reserve's Beige Book released Sept. 8. In most areas of the country, inventories of available homes rose, but the Atlanta region actually saw a drop in inventories because of the slow pace of new construction.

The Beige Book is prepared eight times a year by the Federal Reserve Banks for the Federal Open Market Committee (FOMC) meeting. Using the information from the Beige Book and other staff reports, the FOMC decides what it will do with interest rates. After seeing the Beige Book that was prepared Aug. 8 for its Aug. 10, the FOMC decided to keep its target for the federal funds rate at 0.0 to 0.25 and said that it anticipates that "economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

In other words, don't expect to see interest rates rise any time soon.