The economy shows signs of sluggishness – but not the housing market, according to a new report released by the Federal Reserve Bank of New York. Consumer spending is softening and wage growth is “moderate,” but the housing market has rebounded, according to the Fed.

“Housing activity indicators displayed further gradual improvement in August,” according to the report. Over the last three months, single-family housing starts and permits have rebounded. New home sales gained 7.1% in August month over month and are 18% higher than a year earlier. Existing-home sales saw a 1.2% increase in August.

Homebuilding has also seen some increases, surging 12.3% in August to reach the highest level since June 2007, according to the U.S. Commerce Department. A good portion of that has been in the multifamily sector, which includes apartments.

“A still-strong labor market and low mortgage rates could continue to provide support to housing,” the report notes.

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The report did note the shortage of for-sale homes as one major hurdle that could limit continued growth in the housing market.

“Favorable labor market conditions and a substantial decline in mortgage interest rates continue to act as positive forces,” the report notes. “Inadequate inventories in affordable price ranges continue to be a drag on sales and fuel home-price increases.”

Source: “U.S. Economy in a Snapshot,” Federal Reserve Bank of New York (October 2019) and “Federal Reserve Report Cities ‘Rebounded’ Housing Market,” HousingWire (Oct. 15, 2019)

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