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Survey Indicates Improving AD&C Lending Conditions
Robert Dietz / NAHB / September 3, 2013
Builders and developers continue to report credit easing for acquisition, development, and construction (AD&C) loans according to NAHB’s survey on AD&C financing. In the second quarter of 2013, the overall net tightening index based on the AD&C survey was -16.5, just slightly lower than the -20.5 reported in the first quarter 2013. The index is constructed so negative numbers indicate easing of credit; positive tightening.
A similar net tightening index from the Federal Reserve’s survey of senior loan officers was -19.2 in the second quarter 2013, essentially unchanged from -20.9 in the first quarter. The NAHB and Fed surveys had diverged substantially, but have moved closer together recently and turned in the same direction in the second quarter of 2013.
The continued easing in AD&C credit conditions is consistent with recent FDIC data indicating the stock of AD&C loans rose somewhat during the second quarter.