Credit conditions for acquisition, development, and single-family construction (AD&C) loans were easier in the second quarter of 2016 than in the first quarter, according to the National Association of Home Builder’s Survey on Acquisition, Development & Construction Financing.
Based on the feedback from residential real estate builders and developers, the NAHB net tightening index dropped from its level in the first quarter. Following five straight quarters of decline in the pace of net easing, more respondents on net (25.0%) reported that credit standards on AD&C financing had eased in the second quarter.
In the first quarter of 2016, 13.3% of survey respondents on net indicated that overall lending standards on AD&C loan availability had eased. However, the net share of respondents reporting that lending conditions have eased in the second quarter of 2016 is lower than the net share reporting easier standards at the same time in 2015, 30.7%. The index is constructed so that negative numbers indicate credit easing, and positive numbers mean that credit is tightening.