Real Estate and Construction Residential construction activity remained subdued in January and early February, and commercial building declined slightly. Housing starts in most of the district were unchanged from December and below year-ago levels. However, some builders expect residential construction to rise more than the usual seasonal amount over the next three months. Sales of new and existing homes fell in most of the district, and inventories of unsold homes were up from a year ago. Mortgage demand rose considerably, but the increase mainly reflected the boost to refinancing activity from lower mortgage rates.
Lenders expect refinancing activity to remain strong through the spring.
Commercial construction activity edged lower, amid reports that uncertainty about the economy was causing some builders to become more cautious. Vacancy rates generally held steady, although cutbacks by troubled high-tech firms led to an increase in space available for sublease in one major market. Commercial Realtors continued to express concern about possible overbuilding in some markets. Banking Bankers report that loans declined and deposits increased since the last survey, reducing loan-deposit ratios somewhat. Demand eased for all major loan categories except home mortgage loans and home equity loans, both of which were flat.