Housing Builders reported that housing starts remained high last month and were well above year ago levels. Although many builders expect additional gains in construction activity in the coming months, they are less optimistic than in the last survey. Sales of new homes were up again last month, leaving inventories of unsold new homes at low to moderate levels. According to mortgage lenders, demand last month was generally unchanged but remained well above year-ago levels. Home purchases accounted for almost half of mortgage activity.
Lenders expect mortgage demand to stay strong over the next three months as rates remain low.
Banking Bankers reported that loans and deposits both rose last month, leaving loan-deposit ratios unchanged. Commercial and industrial loans, home mortage loans, and home equity loans increased, while other loan categories were little changed. Increases in demand deposits and money market deposit accounts were partly offset by a decline in large CDs. All respondent banks left their prime lending rates unchanged last month and expect to hold rates steady in the near term. Most banks held their consumer lending rates constant and anticipate no future changes.