Beige Book: Low Priced Homes Leading Recovery

The sale of low- to medium priced homes - aided by the $8,000 first time homebuyer tax credit - is helping to improve the nation's economic outlook, according to the Federal Reserve's new Beige Book report. The Fed says improvements in both residential real estate and manufacturing "continued a pattern of improvement" that emerged this summer. However, the report cautions that one of the weakest sectors of the economy is commercial real estate with the Fed's business contacts describing conditions as "weak or deteriorating." Also, the residential construction sector is still suffering, it says. Even though the Fed sees some improvement in housing, it cautions that sales are not booming anywhere. In the Boston and Cleveland Fed districts Realtors fear a downturn once the tax credit expires in late November. It notes that new and existing home sales were flat in the Philadelphia area and in St. Louis residential sales actually fell.