## FAQ

### 1. Why have loans for new home construction declined?
The decline in loans for new home construction can be attributed to higher interest rates and tight financial lending conditions.

### 2. Which type of loans have seen a continuous decline in volume?
The volume of 1-4 family residential construction loans, which include loans for the construction of single-family homes and townhomes, has fallen for seven consecutive quarters.

### 3. Who holds the majority of outstanding loans for 1-4 family residential construction?
Smaller banking institutions with assets ranging from $1 billion to $10 billion held the largest share of outstanding loans for 1-4 family residential construction.

### 4. How does the current level of residential construction lending compare to past years?
The current amount of existing 1-4 family residential AD&C loans stands 56% lower than the peak level of residential construction lending reached during the first quarter of 2008.

### 5. What alternative sources of financing have supplemented the capital market in recent years?
Equity partners have supplemented the capital market to make up for the reduced lending in residential construction.

## Conclusion

The decline in loans for new home construction, particularly in the 1-4 family residential construction sector, is a concerning trend that is influenced by higher interest rates and tight financial lending conditions. Smaller banking institutions play a crucial role in providing financial and lending opportunities for builders across the United States. Despite the decrease in lending volume, alternative sources of financing like equity partners have helped bridge the gap in residential construction funding. It remains to be seen how the lending landscape will evolve in the coming quarters and how builders will adapt to these changing market conditions.