WASHINGTON -- Loan demand and home sales increased in much of the country early this fall, but not enough to quicken the pace of the sluggish recovery, according to the Federal Reserve.

The Fed's periodic report of regional economic conditions, known as the Beige Book, found that the economy continued to strengthen across the Midwest, South, and much of the Atlantic coast during the last two months.

The report was released on Wednesday. Improvements in the West and in New England continued to be mixed.

|Slow and Uneven'

"Economic activity has continued to increase in most of the districts, but at a slow and uneven pace," the report said.

Pickup in loan demand was most dramatic in the Southeast and Midwest, while remaining sluggish in the New York, Dallas, and San Francisco regions.

"Mortgage refinancing activity, however, seems to have peaked in a number of areas," the report concluded.

The rise in residential construction and sales was most dramatic in low-to-moderate priced homes. The real estate market stopped declining in many New England states, and sales volume in that region was up significantly over last year.

In addition, retail sales grew across most of the country, but manufacturing activity lost its earlier momentum.

Highlights by region follow.

Boston: The residential real estate market stabilized, with prices flat and volume up as much as 30% over last year.

New York: Demand for consumer loans and residential mortgages increased, but demand for commercial and industrial loans, as well as non-residential mortgages, weakened.

Philadelphia: Commercial and industrial loans were up, with consumer lending level or improving.

Cleveland: A few large banks increased loans to businesses. Residential mortgages continued to be the most active part of the loan market, although mortgage refinancing demand appeared to be easing.

Richmond: Credit conditions changed little. Rates on commercial loans were steady, but rates on consumer loans dropped.

Atlanta: Bankers noticed an influx of new deposits from insurance settlements related to hurricane damages, but little change in commercial or consumer loan demand.

Chicago: Trends in commercial and industrial loan demand remained mixed, with suggestions that consumers were "waiting out the election."

St. Louis: All categories of loans at large banks increased.

Minneapolis: Construction showed signs of reviving, with home sales strong.

Kansas City: Loan demand strengthened. Bankers said that rates on consumer loans would fall.

Dallas: Banking conditions remained weak, with soft loan demand blamed on caution about the near-term economic outlook.

San Francisco: Consumer loan demand dropped again in California. It was stronger elsewhere in the district.

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