Housing markets continued to soften in December and demand for residential mortgages continued to weaken, according to a Federal Reserve report on current economic activity called the Beige Book."Nearly all [Federal Reserve Bank] districts reported a continued softening of housing markets, and high inventories of new homes have generally led to slowing in residential building," the Beige Book says. All of the 12 Federal Reserve Banks reported "slow" home sales except the Richmond district, which reported a modest increase. The Boston, New York, Atlanta, and Chicago district banks reported decreases in home prices. In the San Francisco district (where homes are still appreciating), Realtors "are offering significant incentives to sell properties," the Beige Book says. The Dallas bank stated that the "lower-priced home market was slower than the higher-priced segments."

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