Magazine article Mortgage Banking

FDIC: Economic Outlook Positive Even as Housing Slows

Magazine article Mortgage Banking

FDIC: Economic Outlook Positive Even as Housing Slows

Article excerpt

Job market conditions remained generally positive in most of the United States through the first quarter of 2006, with some pockets of weakness along the Louisiana Gulf Coast and the auto-dependent upper Midwest, according to a report by the Federal Deposit Insurance Corporation (FDIC).

The FDIC's summer 2006 edition of FDIC State Profiles noted that many states have shown signs of an emerging slowdown in housing market activity even as FDIC-insured institutions continued to record strong earnings, supported by low credit losses and growth in both real estate and commercial lending.

Most regions are seeing solid job growth and strong economic activity, which have helped to support loan demand, according to FDIC Chief Economist Richard A. Brown.

"We also see housing market activity slowing in a number of regions, as affordability continues to be a challenge," said Brown. "It appears that housing will probably not be a leading sector for the U.S. economy in the second half of the year."

Furthermore, said Brown, home-sales activity appeared to be slowing across many areas of the country, and inventories of unsold homes are increasing.

FDIC regional analysts noted that affordability continues to be a challenge for homebuyers, particularly in the Mid-Atlantic and Western states. …

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