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Chill in housing drags on economy
The Fed's latest survey finds a slowdown in housing in most regions. This could lead it to leave interest rates alone.
By ASSOCIATED PRESS
Published October 13, 2006
WASHINGTON - The economy continued to grow in the early fall despite a "widespread cooling" in the once-hot housing market, the Federal Reserve reported Thursday. The Fed's latest survey of business conditions around the country found the economy expanding with growth being described as "moderate or mixed." However, the report found there was a distinct slowdown in housing with the majority of the Fed's 12 regions reporting lower asking prices for homes, a softening in sales and rising inventories of unsold homes. The Fed said that reports from around the country "indicated widespread cooling" in housing markets with financial institutions finding that mortgage lending activity had tapered off. That decline in lending was being offset to some extent by an increase in lending for commercial projects in several districts, the Fed said. It is widely expected that the Fed will for a third straight meeting leave rates unchanged when it meets later this month.
[Last modified October 12, 2006, 23:31:39]
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