Credit conditions for loans used by builders and developers tightened in the third quarter, according to a survey published Friday by the National Association of Home Builders (NAHB).

Loans for residential land acquisition, development and construction (AD&C) were stricter in the third quarter, the NAHB found, with the net easing index at negative 15.3 for the three-month period.

A negative number indicates net tightening of loan conditions. This was the 19th consecutive quarter — nearly five years — in which residential builders and developers reported tightening credit conditions.

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The NAHB survey aligned with the Federal Reserve’s survey of senior loan officers in the third quarter, in which the net easing index came in at negative 15.5.

Lenders had reported a slight easing of loan conditions in the second quarter of 2026, but they have since revised their view and now agree with builders and developers that credit has been tightening since the beginning of 2022. The Fed’s survey shows net tightening in 18 of the past 19 quarters.

The Fed’s survey found that lending standards for residential mortgages were essentially unchanged, while commercial real estate lending standards for multifamily and AD&C loans were tighter. The Fed also reported that demand for residential mortgages, as well as for multifamily and AD&C loans, was “significantly weaker” quarter over quarter.

The Fed held its key short-term interest rate steady at a target range of 3.75% to 4% in October after raising it by 25 basis points in September.

The cost of AD&C credit changed only slightly in the third quarter. The average contract interest rate on land development loans declined to 7.83% from 8.09% in the second quarter, and the initial points charged by lenders declined for all types of AD&C loans.

However, the average contract rate on loan acquisition rose from 7.77% to 8.08%. Rates on loans for speculative single-family construction increased from 7.28% to 7.72%, and rates on loans for presold single-family construction jumped from 7.01% to 7.27%.

The average effective interest rate on speculative single-family construction was essentially unchanged at 11.83%. The average effective rate on land acquisition loans increased to 10.55% from 10.43% in the second quarter.

The effective rate on land development loans fell by almost a full percentage point, to 11.69% from 12.59%. The cost of loans for presold single-family construction also declined, to 11.47% from 11.67%.

“While the market for residential mortgages has been showing signs of stress recently — including a recent decline in mortgage applications and increase in delinquencies — it is important not to overlook the role access to AD&C credit plays in helping builders and developers expand the supply of affordable housing,” the NAHB stated in the report.