Problems in the commercial real estate market overshadowed other signs of a recovery in financial markets, according to a Federal Reserve Board report released Wednesday.
The central bank's Beige Book, a report on economic activity in its 12 districts, found that the commercial real estate market weakened in each of its districts over the past three months. In the Boston district, one contact told the Fed that financial volume for small commercial deals was at half the levels of the first quarter.
There was more positive news on the residential front, where eight districts New York, Philadelphia, Cleveland, Richmond, Chicago, Kansas City, Dallas and San Francisco reported gains in home sales.
Still, overall lending was found to be stable at best. As the auto industry suffers through major bankruptcies, the Atlanta and Chicago districts said credit for auto dealers or any other business tied to the sector was lower. The pace of refinancing was mixed across the districts and loan quality showed signs of further deterioration in the Philadelphia, Richmond, Cleveland and Dallas districts.