Fed Officials: The Worst is Over
The worst of the economic crisis is over, according to U.S. officials speaking at a financial conference Friday at Vanderbilt University.

Frank Nothaft, the chief economist for Freddie Mac, said housing sales have just about hit bottom and a third of home sales are now foreclosed properties.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that the declining commercial real estate market still poses a risk to the economy.

New York Fed chief William Dudley complained that the programs the government has put in place are being undermined by public perception that they are unfair to average taxpayers and that has made some potential investors fearful that they would be the focus of public outrage if they profit from the programs.

“It is worth emphasizing (that) actions that lead investors to shun taking risk, especially in this environment, are ultimately detrimental to the ability of households and businesses to secure credit at reasonable borrowing rates,” Dudley said.

Source: Reuters News, Ros Krasny and Kristina Cooke (04/18/2009)

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Signs Point to Improving Economy
Economic observers point to several factors that indicate the economy in general and the housing market in particular may be on the mend.

Positive signs include:

● Sales of single-family homes in March remained flat compared to January and February at $358,000, the U.S. Commerce Department reported.
● The Labor Department reported claims were down in the week ending April 11. While some argued this could just reflect the shortened Easter/Passover holiday, others took the optimistic view that some segments of the economy are stabilizing.
● New-home construction remains low because there is so much inventory—but the situation doesn’t appear to be worsening.

“The economy is still very weak, but there are some encouraging signs that support cautious optimism,” Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in a speech Thursday.

Source: The Wall Street Journal, Sudeep Reddy (04/17/2009) 

Fed Report: Real Estate Stabilizing in Key Cities
While real estate and other industries remained weak in all 12 of the Federal Reserve districts, there is reason for optimism in several areas, according to the Federal Reserve, which released its periodic “Beige Book” report of economic activity on Wednesday.

In Boston, Fed contacts reported “early signs of improvement” in the residential real estate sector, and the news was equally good in New York where the book said banks are reporting “the most widespread rise in demand for residential mortgages in more than seven years.”

In Richmond, Va., commercial real estate is reporting moderate increases in activity and residential lending is rising because of strong demand for refinancing, the report said. Demand for refinancing is “hard to keep up with,” one of the Fed’s contacts said.

Meanwhile, commercial real estate weakened in Kansas City while residential real estate is holding steady, the report concluded.

Source: The Wall Street Journal, Meena Thiruvengadam (04/15/2009)