The Fed released its latest assessment of economic activity in the 12 Federal Reserve Bank districts Wednesday afternoon.
The Beige Book notes that the “activity in residential real estate markets increased modestly” during July and August.
The Philadelphia district bank reported that some buyers looking for newly constructed homes switched to an existing one due to the jump in rates.
“Philadelphia conveyed that some borrowers apparently preferred to lock-in a mortgage rate for an existing home rather than wait for a new home to be completed and chance higher mortgage rates,” the Beige Book says.
(Existing home sales rose 6.5% in July and new home sales fell 13.4%, according to Realtors and Census Bureau reports.)
On the lending side, the Beige Book indicates that lending standards are “largely changed” since June. “Purchase mortgage lending continued to grow moderately” in most Fed districts.
Meanwhile, rising prices has increased demand for second mortgages and home equity lines of credit. But demand for refinancings “declined in the New York, Philadelphia, Cleveland and Richmond districts,” according to the Beige Book.