Economy Watch: Beige Book Says Multifamily Outlook Mostly Positive

The central bank's districts reported varied outlooks on multifamily activity, but they were largely optimistic on the whole.

By Dees Stribling, Contributing Editor

Janet Yellen, Chair of the Board of Governors of the Federal Reserve System
Janet Yellen, Chair of the Board of Governors of the Federal Reserve System

The Federal Reserve released its latest Beige Book on Wednesday, which is a collection of anecdotal reports about the state of the economy from each of the central bank’s 12 districts. The overall condition of the economy: so-so. Or to put it in central banker terms, “Most districts indicated a modest or moderate pace of expansion…Outlooks were mostly positive, with growth expected to continue at a slight to moderate pace in several districts.”

Labor market conditions remained tight, according to the Beige Book, with modest employment and wage growth noted over the reporting period. “Most districts characterized input costs and/or output prices as fairly flat, but prices increased slightly.”

As for commercial real estate, the book said that activity generally improved, and the outlooks were mostly optimistic, though contacts in a few districts expressed concern about the economic uncertainty surrounding the upcoming presidential election. Commercial rents were flat to up, and vacancy rates were generally low or declined in most places, except in the Houston metro area, where office vacancies increased further because of the oil slump.

Reports on multifamily activity varied but were positive on balance, noted the book. Strength in the apartment market was noted by the Dallas District, whose territory is Texas, northern Louisiana and southern New Mexico, but with the exception (again) of the Houston metro area. Growth in multifamily construction was positive in the Boston and Atlanta districts but was mixed in the Richmond District and slowed further according to New York’s report.