Is the Fed Worried About Multifamily Overbuilding?

ATLANTA—The Federal Reserve’s latest Beige Book release indicates that economic activity has expanded in nine of the districts since the last report. Residential and commercial real estate activity improved with stronger activity cited for multifamily construction.

We caught up with KC Conway, SunTrust Commercial Real Estate’s credit risk manager and head of valuation, to comment on the Federal Reserve’s latest Beige Book release. He told us while Beige Book findings are anecdotal, they provide color that is useful when paired with the statistical realities in a market. In the case of the most recent Beige Book release, he says the information is generally in line with trends we are seeing in many SunTrust regions.

The Federal Reserve and other bank regulatory agencies have been signaling since mid-2015 that they had concerns about the rising levels of commercial construction activity," Conway says. “Therefore, the comments in the latest Beige Book indicating that construction activity remains robust is not surprising.

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