Adobe Stock

The volume of residential construction loans increased by 1.7% during the second quarter of 2018. The increase marks 21 consecutive quarters of growth, reports NAHB chief economist Robert Dietz, indicating continued, modest growth for single-family construction.

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 a useful 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.

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