Builders Report Worst Lot Shortage Ever

Filed in Economics, Land Development by on October 25, 2021 13 Comments

While builders continue to grapple with labor and material supply-side challenges, they are confronting what could be an even more urgent problem — an extreme lot shortage.

In a recent NAHB survey, 76% of builders reported that the overall supply of developed lots in their areas was low to very low. This is an all-time record — by a wide margin — since NAHB began collecting the information in the 1990s. The previous record was 65%, recorded in 2018.

Responding to questions in the September 2021 NAHB/Wells Fargo Housing Market Index (HMI) survey, 46% of single-family builders characterized the supply of lots simply as low, and 30% said the supply of lots was very low, for a total of 76% of builders indicating some type of problem with lot supply.

builders indicate lot shortage

In addition to the overall supply, since 2013 the HMI survey has also asked builders to rate the supply of A, B and C lots in the areas where they build separately. As usual, shortages tended to be most acute among lots in the most desirable, or “A,” locations. Seventy-four percent of builders said that the supply of “A” lots was low or very low, compared to 67% for “B” lots and 57% for “C” lots.

All three percentages for the respective categories are at record highs, however, indicating that lot supply problems are historically widespread irrespective of the desirability of the locations.

NAHB senior economist Paul Emrath provides further analysis in this Eye on Housing blog post.

Tags: , ,

Comments (13)

Trackback URL | Comments RSS Feed

  1. Steve Holzer says:

    Maybe it is time to consider an alternative to planting the next cornfield with homes? Time for more efficient urban infill projects creating communities modeled on some of the best quality of life EU cities.

  2. It is no surprise that there is a national shortage of lots as states and towns across the country are causing the development of land to be more costly and have increased the time frame to do so. The regulations have added at least 25% more in cost and the time to develop has gone from less than one year to in many cases over two years to receive approvals.

Leave a Reply

Your email address will not be published. Required fields are marked *