Acquisition, Development, and Construction Loan Volumes Decline in Q2
Decline for AD&C Loan Volume in the Second Quarter
Rising interest rates and tightening financial conditions contributed to a decline in the volume of total outstanding acquisition, development, and construction (AD&C) loans during Q2, the National Association of Home Builders (NAHB) reported (9-8-23).
The volume of loans by FDIC-insured institutions on 1–4 unit residential buildings declined 2.8% in Q2. The volume of loans declined by $2.9 billion during the quarter. This loan volume retreat places the total stock of home building construction loans at $101.41 billion, off a post-Great Recession high set during Q1.
The stock of residential construction loans is up 5.5% year-over-year. Since 2013Q1, the stock of outstanding home building construction loans has increased by 151%, an increase of more than $61 billion.
The FDIC data reveal that the total decline from peak lending for home building construction loans continues to exceed that of other AD&C loans (nonresidential, land development, and multifamily), the NAHB says. Such forms of AD&C lending are off a smaller 11% from peak lending. For Q2, these loans posted a 3.2% increase.
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