Jobless Recovery Says Beige Book
That doesn't bode well for the housing market, since long term unemployment is one of the top reasons homeowners are still losing their homes to foreclosure, and foreclosure is still the biggest threat on the horizon for the housing recovery, according to many experts.
But the report showed strengthening demand in the residential real estate market -- at least for low-priced homes.
The Beige Book report collects anecdotal information on the economy from the 12 Federal Reserve districts. Nine of those report that economic activity improved since the last Beige Book report released January 13, though in most cases the improvements were modest.
The districts that did not participate in the modest growth included the Atlanta and St. Louis districts, where economic conditions were mixed, and the Richmond region, were economic activity was soft.
Residential real estate was a bright spot in the Fed's survey - though with a warning. "Most Districts attributed stronger home sales to the home-buyer tax credit, with several contacts apprehensive about future sales once the credit expires on April 30," notes the report.
Sales were highest for lower-priced homes in the districts of Philadelphia, Cleveland, Kansas City, and Dallas. Most of this activity seems to represent a clearing out of existing homes, not sales of new homes. For example, the construction of new homes was down or stagnant in most districts except for Minneapolis, Kansas City, and Dallas, which showed strengthening home construction.
In keeping with the demand for low-prices homes, home prices mostly remained flat or declined slightly, though signs of improvement were noted in the Boston and San Francisco districts.