Net Tightening Index

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The NAHB Net Tightening Index is a quarterly indicator that uses information from surveys that ask builders and developers about whether the availability of acquisition, development and construction (AD&C) credit has gotten better, worse or stayed the same since the previous quarter. The index is constructed so that positive numbers indicate tightening of credit, with larger numbers indicating more widespread tightening. The findings are published each quarter in NAHB's Survey on Acquisition, Development & and Construction Financing report.

1st Quarter 2020 High-Level Summary:

  • For the first time since 2012, NAHB members reported tightening for AD&C loans. After 30 consecutive quarters of easing, the availability of credit for AD&C loans tightened significantly, with NAHB s net tightening index jumping to 22.7 – nearly a 40-point increase from the fourth quarter 2019 reading (-22.3).
  • None of the survey respondents said availability of credit for land acquisition had improved, while 27% said it had worsened.
  • For single-family construction, 6% of respondents said credit conditions were better in the first quarter of 2020 than a year prior, while 26% said conditions had worsened.

View the complete findings in the latest Survey on Acquisition, Development & Construction Financing.