Small U.S. homebuilders tap the brakes as credit squeeze, rising rates hurt

July 6 (Reuters) - Small U.S. homebuilders are backing off from bringing more houses to the market, discouraged by a banking crisis-led credit squeeze and rising borrowing costs, industry experts said, exacerbating the shortage of new homes...

Adding to the woes, stricter lending criteria after the March collapse of Silicon Valley Bank is likely to slow the flow of credit to small businesses and households and hurt the affordability of buyers...

"I see a lot of small builders pulling back on some developments, sitting on the land, not moving the dirt until they see some relief in this market," said Paul Schwinghammer, president of Indiana-based Hallmark Homes...

"I do expect tighter lending standards to weigh on housing construction as the year progresses and don't look for the May pace of starts to be sustained," said Nancy Vanden Houten, U.S. lead economist at Oxford Economics.cs..

Public builders' share of housing starts for sale rose to 40% in the first quarter, up from 37% last year and 36% in the prior quarter, according to an analysis of census data by Seaport Research Partners...

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