Residential construction loans grow in Q2
The volume of residential construction loans increased by 1.7% during the second quarter of 2018, marking 21 consecutive quarters of growth, according to the National Association of Home Builders (NAHB).
The recent stabilization of year-over-year growth rates is an indicator of continued, modest growth for single-family construction, according to Robert Dietz, chief economist of the NAHB.
Dietz says tight availability of acquisition, development and construction (AD&C) loans has been a limiting factor for home building growth, but easing credit conditions and a growing loan base have helped expand residential construction activity.
According to data from the FDIC and NAHB analysis, the outstanding stock of 1-4 unit residential construction loans made by FDIC-insured institutions rose by $1.3 billion during the second quarter of 2018, raising the total stock of outstanding loans to $77 billion.
On a year-over-year basis, the stock of residential construction loans is up almost 8%, which is an indicator of the additional volume builders intend to add to construction activity. Since the first quarter of 2013, the stock of outstanding home building construction loans has grown by 89%, an increase of $36 billion.
But lending remains tight compared to years past. The NAHB says the current stock of existing residential AD&C loans now stands 62% lower than the peak level of residential construction lending of $203.8 billion reached during the first quarter of 2008.
FDIC data also indicates 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 recent stabilization of year-over-year growth rates is an indicator of continued, modest growth for single-family construction, according to Robert Dietz, chief economist of the NAHB.
Dietz says tight availability of acquisition, development and construction (AD&C) loans has been a limiting factor for home building growth, but easing credit conditions and a growing loan base have helped expand residential construction activity.
According to data from the FDIC and NAHB analysis, the outstanding stock of 1-4 unit residential construction loans made by FDIC-insured institutions rose by $1.3 billion during the second quarter of 2018, raising the total stock of outstanding loans to $77 billion.
On a year-over-year basis, the stock of residential construction loans is up almost 8%, which is an indicator of the additional volume builders intend to add to construction activity. Since the first quarter of 2013, the stock of outstanding home building construction loans has grown by 89%, an increase of $36 billion.
But lending remains tight compared to years past. The NAHB says the current stock of existing residential AD&C loans now stands 62% lower than the peak level of residential construction lending of $203.8 billion reached during the first quarter of 2008.
FDIC data also indicates 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).