Tight Lending Standards Thwarting Builders

Washington, DC, Dec. 7, 2011 -- Tight lending standards are continuing to hurt home builders and developers, according to the National Association of Home Builders.

Banks are making it difficult for firms to borrow for acquisition, development and construction.

“Restoring the flow of credit to housing is critical for the industry to rebound, provide jobs and boost the economy,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

More than half of the single-family builders and developers surveyed by NAHB indicated they had decided to put any new construction or land activity on hold until the financing climate improves.

This has broad repercussions for housing and the economy, NAHB said. With inventories of new homes nearly depleted in many markets, builders should be gearing up to meet demand, create new jobs and keep the expansion moving forward.

Unfortunately, production remains stymied because builders in these locations cannot get credit from lending institutions to begin work on new homes, the association said.