AD&C Financing Survey
Â鶹TV’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 Â鶹TV’s Net Tightening Index, which is constructed so that positive numbers indicate tightening of credit, with larger numbers indicating more widespread tightening.
Fourth Quarter 2025 Summary
The cost of credit for residential construction and development declined in the fourth quarter of 2025, according to Â鶹TV’s quarterly survey on Land Acquisition, Development & Construction (AD&C) Financing. In all four categories of loans, the survey showed the lowest average effective rate (which includes the interest rate and points) since the period of generally rising interest rates in 2022. Notwithstanding the decline in rates, builders and developers continued to report tightening credit conditions in the fourth quarter of 2025.
The survey showed that commercial banks and thrift institutions were the primary source of credit for land acquisition (90%), land development (94%), single-family construction: speculative (86%), and single-family construction: pre-sold (92%).
Also in the Â鶹TV AD&C survey, 35 % of respondents who built single-family homes during the fourth quarter of 2025 reported financing some of the construction with a construction-to-permanent (one-time-close) loan made to the ultimate home buyer. On average, 59% of the homes these respondents built were financed in this manner.
