The latest Senior Loan Officer Opinion Survey (SLOOS) was released by the Federal Reserve for the third quarter. This dataset contains important information on lending conditions across the U.S. economy. Economists, policymakers, investors, and analysts track this data as credit tightening (or loosening) can lead to economic growth or decline.
As such, this data is also important for the home building industry to track as it can capture the impacts of the “long and variable lags” of the Fed rate hikes over the past 18-plus months. In the SLOOS report, we can track credit availability for commercial, construction, and land development loans. The NAHB provides a similar credit read on acquisition, development, and construction (AD&C) loans.
As seen, credit tightened sharply at the start of the pandemic and again as the Fed started raising rates in early 2022. So far, this cycle has produced some turbulence, including the bank failures earlier this year, but has yet to produce a protracted downturn.
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