The total volume of outstanding acquisition, development, and construction (AD&C) loans issued by FDIC-insured institutions fell to $491 billion in the third quarter of 2024, declining from $496 billion in the second quarter. This marks the third consecutive quarterly drop in loan volumes, according to the National Association of Home Builders.
The volume of 1-4 family residential construction and land development loans totaled $91 billion in the third quarter, reflecting an 8% decline compared to the same quarter a year ago. This marks the fifth consecutive quarter where loan volumes declined on a year-over-year basis. Other real estate development loans amounted to $400 billion, decreasing by $4 billion from the previous quarter.
FDIC data reflect only the total outstanding loan stock rather than underlying loan flow changes, and lending activity remains significantly lower than historical levels. The current volume of 1-4 family residential AD&C loans is 55% lower than the $204 billion peak in the first quarter of 2008. Alternative financing sources, such as equity partnerships, have supplemented this gap in capital availability.
Despite the decline in loan volume, the amount of past-due and nonaccrual loans increased, surpassing $1 billion for the first time since 2014. Of this total, loans in nonaccrual status accounted for $506 million, while those 30-89 days past due stood at $492 million, and loans 90 days or more past due totaled $65 million. Past-due and nonaccrual loans now represent 1.2% of the total outstanding stock of 1-4 family residential AD&C loans. Image: National Association of Home Builders
