AD&C Financing Survey


NAHB’s quarterly Survey on Acquisition, Development and Construction (AD&C) Financing asks builders and developers about whether the availability of AD&C credit has improved, worsened or stayed the same since the previous quarter. The results are tracked within NAHB’s Net Tightening Index, which is constructed so that positive numbers indicate tightening of credit, with larger numbers indicating more widespread tightening.

First Quarter 2024 Summary:

According to NAHB’s Survey on Acquisition, Development & Construction Financing, the availability of loans for acquisition, development and construction (AD&C) tightened from the fourth quarter of 2023 (Q4 2023) to the first quarter of 2024 (Q1 2024) and remained expensive. Q1 2024 was the ninth consecutive quarter of credit tightening.

The most common form of credit tightening reported by survey respondents was a reduction in the amount lenders were willing to lend (reported by 62% of builders and developers). This was followed by 48% of respondents reporting lenders requiring personal guarantees and 48% of respondents reporting increased interest rates.

In Q1 2024, 97 builders responded to NAHB’s survey and reported the following:

Interest Rates

The average effective interest rates from Q4 2023 to Q1 2024 were reported as below. The effective interest rate takes the contract interest rate and initial points charged into account. The changes in the effective interest rates below were driven primarily by the initial points charged.

  • Loan for land acquisition increased from 10.58% to 11.09% (the highest these rates have been since 2018 when NAHB began tracking the effective interest rates).
  • Loans for land development increased from 11.25% to 13.1%.
  • Loans for speculative single-family construction increased from 12.96% to 13.35%.
  • Loans for pre-sold single-family construction decreased from 15.65% to 12.95%.

Credit Availability

  • 2% reported credit for land acquisition improved in Q1 2024; 31% reported it had tightened. (Up from 25% reporting tightened credit from Q3 2023 to Q4 2023.)
  • 3% reported credit for land development had improved in Q1 2024; 31% reported it had tightened. (Same percent as reported tightened credit from the Q3 2023 to Q4 2023.)
  • 8% reported credit for single-family new construction had improved in Q1 2024; 17% reported it had tightened. (Down from 20% reporting tightened credit from Q3 2023 to Q4 2023.)

View the full Q1 2024 survey results here.