Residential construction loans outstanding reported a 4.5% increase in the final quarter of 2015, resulting in an upward trend for 11 consecutive quarters. The growth in acquisition, development and construction (AD&C) loans, combined with easing credit conditions and a growing loan base, is poised to be a positive sign to the residential building market. National Association of Home Builders economist Robert Dietz dives into this field and provides some analyses. Dietz writes,

"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 $2.6 billion during the fourth quarter of 2015, raising the total stock of outstanding loans to $60.9 billion.

On a year-over-year basis, the stock of residential construction loans is up 18.9%, as indicated by the red bars in the graph below. The current reading is higher than the 16% to 17.5% annual growth rate range that the series had been in for the prior year and a half. This change suggests accelerating single-family building growth in 2016, which is consistent with NAHB’s forecast."

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