Amount Of Acquisition, Development, And Construction Loans Continues To Grow

June 2, 2016

One of the main factors holding back home construction from experiencing a stronger rebound has been the tight availability of acquisition, development, and construction (AD&C) loans, but as credit conditions ease and the loan base grows, the residential building market will expand.

As NAHB’s Eye on Housing blog reports, the outstanding stock of 1-4 unit residential construction loans made by FDIC-insured institutions rose by $2.3 billion during the first quarter of 2016. That raises the total stock of outstanding loans to $63.2 billion. The stock of residential construction loans is up 17.8 percent year-over-year and, since the first quarter of 2013, the stock of outstanding home building construction loans has grown by 55 percent, or $22.4 billion.

Lending still remains much lower than in the past as the current stock of existing residential AD&C loans sits at 69 percent lower than the peak level of residential construction lending of $203.8 billion experienced during the first quarter of 2008.

For the full report and to view an accompanying chart, click the link below.

Read more