As demand for residential mortgages continues to slow, most Federal Reserve district banks are noticing a pick-up in commercial real estate construction and lending."Commercial construction gained strength in most of the country" during September, according to the Federal Reserve Board's Beige Book. "Reports on residential real estate indicated, however, widespread cooling with the majority of districts citing lower asking prices, rising inventories of homes on the market and softening sales." Several Federal Reserve banks reported that homebuilders and home sellers are offering incentives to attract buyers. "Softer home demand in San Francisco led to layoffs for mortgage brokers and real estate agents," the Fed report said. The Beige Book said the "weakness" in residential lending is being offset by increases in CRE and business lending.

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