While hints of inflation are emerging and the job market improved in January and February, mortgage lending standards remain tight and the housing industry is still anemic, according to the Federal Reserve Beige Book report released yesterday.

"Recent activity in residential real estate varied, but overall sales and construction remained at low levels across all districts," the survey stated.

Lending requirements remained tight in all districts. Atlanta actually reported tighter home loan standards. Although an improving job market is definitely good for the economy, stringent mortgage lending requirements are not good news for homeowners or home buyers hoping to take advantage of current mortgage rates.

New York saw a stable housing market with some improving markets. Other Fed districts reported mixed or sluggish real estate activity. For instance, home prices continued to fall in the Philadelphia area, but mainly at the high end of house prices. The New England district said home sales continued to decline significantly in Rhode Island, Connecticut, and Maine, but increased modestly in Massachusetts and New Hampshire.

Loan demand varied, depending on the area and type of loan. Demand for residential real estate loans increased in Philadelphia, Atlanta, and Dallas but was weaker in New York, Cleveland, St. Louis, and Kansas City.

All 12 of the of the Fed's regions reported job creation modest to moderate economic growth in January and February. Atlanta businesses prefer temporary workers, and other districts saw more demand for staffing services.

Manufacturers said they were passing through their higher costs to customers or planned to do so soon. Home builders in the Cleveland and Atlanta districts noted rising material costs, but said they had little power to pass on costs to buyers.

Although retailers in some districts said they had increased prices or expected to increase prices in the next few months, the survey revealed little evidence of wage pressures across districts.

Signs of inflation like rising wages and prices could prompt the Federal Reserve to begin increasing interest rates in order to control that increasing inflation.