The volume of acquisition, development, and construction (AD&C) loans increased 3.8% in Q1 2016, according to data from the FDIC, reports NAHB's Robert Deitz. The stock of residential construction loans grew 17.8% from Q1 2015.
The stock of existing residential AD&C loans remains well under the highs of 2008. For Q1 2008, lending reached $208.3 billion. The current stock is 69% lower than that amount. Dietz added:
Despite the steady increases in residential AD&C lending, there exists a lending gap between home building demand and available credit. This lending gap is being made up with other sources of capital, including equity, investments from non-FDIC insured institutions and lending from other private sources, which may in some cases offer less favorable terms for home builders than traditional AD&C loans.