Real Estate Industry Improves
Paul Nyhan Bloomberg Business News, THE JOURNAL RECORD
WASHINGTON -- The U.S. real estate markets are showing marked improvements after a sluggish fall and early winter, according to a survey released Wednesday by the Federal Deposit Insurance Corporation.
The FDIC's composite index of bank examiners' confidence in residential and commercial real estate markets reached 67 in April, its highest mark since July, 1994, and a seven-point jump from the last survey in January.
That's good news for bankers, because a more active real estate market generates more loans for the banking industry, which is already reporting record profits.
FDIC officials said the improvement in the real estate industry was driven by relatively low interest rates and strong U.S. economic growth.
"The ongoing real estate recovery has broadened significantly," said FDIC Chairman Ricki Helfer, in a prepared statement. While the average interest rate on a 30-year mortgage is low by historical standards, the rate has been rising since hitting 6.94 percent in mid-February. Last week's average rate on a 30-year mortgage was 8.01 percent, according to the Federal Home Loan Mortgage Corporation.
The FDIC's index is based on a nationwide poll of 326 senior examiners and asset managers from federal bank and thrift regulatory agencies. Scores above 50 indicate that more respondents thought local real estate market conditions were improving than thought they were declining. The most recent survey covered developments in February, March and April. …