U.S. Real Estate + Construction Lending Activity

The fourth quarter of 2022 and the first quarter of 2023 saw a continued rise in construction loan balances.

In 2022, banks reported around $467 billion in the fourth quarter, up from $447 billion in the third quarter. Construction loans made up 3.8% of all loans and leases, up from 3.7% in the third quarter. That put construction lending at its highest percentage of gross loans since the second quarter of 2011.

In 2023, residential construction loans surged again. But rapidly rising rates and slowing home sales may hamper future gains. US financial institutions reported over $92 billion in one- to four-family construction loans at the end of March 2023. This surge was a 5% increase from the last quarter and an 18% increase since the first quarter of 2021—making it the largest annual increase since 2016. As for nonresidential construction loans, the first quarter of 2023 saw a 2% increase to $320 billion. Construction loan activity among top lenders is diverging despite the overall surge in residential construction lending. The US’s top construction lenders – Wells Fargo, Bank of America, and JPMorgan Chase – reported year-over-year declines in both residential and nonresidential construction loans.


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