Fed: Housing Sales, Construction Activity Falling

Housing sales and construction activity declined in July and August while demand for mortgage loans weakened, according to the Federal Reserve Board's newly released Beige Book."In general, residential real estate contacts expected the housing markets would remain weak, if not weaken further, in the months ahead," the Beige Book says. In the June Beige Book, the Federal Reserve district banks noted that housing markets continued to "cool." But the references to cooling have been replaced by reports of "substantial increases" in unsold homes. The Kansas City bank attributed some of the increase in inventories to a "sizable number of foreclosures." The Atlanta bank reported that the property insurance premiums in some parts of Florida have nearly quadrupled in the past year, and this is "adversely impacting housing and commercial real estate demand in the coastal markets." Meanwhile, commercial real estate markets remained strong in many parts of the United States, and many Federal Reserve banks reported increases in CRE development and construction.