The Federal Open Market Committee (FOMC) released its minutes from its meeting in July on Wednesday, which detailed the Fed’s outlook on the state of all facets of the economy since its meeting in June, when it decided to raise interest rates.
In their staff review of the economic situation, the FOMC reported that investment in real estate declined slightly in the second quarter of 2017, even though starts in single-family homes and multifamily homes rose in June. The number of building permits that were issued for both single-family and multifamily homes was also lower in the second quarter than it was in the first. In May as well as June existing home sales decreased; however, new home sales in May were on the rise.
The FOMC also reported that Treasury yields for long- and intermediate-term securities showed a slight increase in June, which was attributed to potential declines in the long-term neutral real interest rates in the past few years as well as an accommodative foreign monetary policy. Commercial real estate financing conditions also remained accommodative, although loans slowed.
In the residential mortgage market, the Fed observed that the market was hardly changed and new credit continued to flow at a reasonable pace, while at the same time many respondents of the Senior Loan Officer Opinion Survey (SLOOS) reported that standards for most residential loans were not as tight as they have been in the past.
Participants of the meeting did unanimously agree that regulatory and supervisory tools that have been developed since the housing crisis have been paramount in helping maintain financial stability, as well as the fact that a continued, slow increase in the federal funds rate was an appropriate solution to maintain their goal of maximum employment and an inflation rate that hovered around 2 percent.
You can read the full details of the minutes here.