Lot Shortage Eases but Still a Problem
Obtaining lots for new homes remains a challenge for many of NAHB’s builders, but the shortages are not as widespread as they were in 2021, according to responses to the May 2023 survey for the NAHB/Wells Fargo Housing Market Index (HMI).
Nearly half (42%) of single-family home builders characterized the supply of lots simply as low, and another 25% said the supply was very low. That total (67%) is down from 76% who reported shortages in the September 2021 survey, but is still the second highest incidence of lot shortages on record since NAHB began collecting the information in 1997.
The current percentage of builders reporting a shortage of lots is particularly high relative to the current level of production. Over the past six months, total housing starts have been hovering around an annual rate of 1.4 million. In comparison, in 2005 when total housing starts peaked at more than 2 million, 53% of builders were reporting lot shortages.
One factor contributing to the lot shortage is availability of credit for developers. Loans to develop new residential lots were becoming both harder to obtain and more expensive over the prior year. Government regulation — which can lengthen and complicate the lot development process and add to its cost — is another factor. An NAHB study found that government regulation is responsible for roughly 42% of the cost of a lot for the average new single-family home.
Paul Emrath, NAHB vice president for survey and housing policy research, provides a breakdown of shortages among A, B and C lots in this Eye on Housing post.
Latest from NAHBNow
Aug 01, 2025
Meet at Home with Your Members of CongressNAHB members across the nation can build on the success of the June Legislative Conference by meeting with their lawmakers in their home districts in August to discuss key issues that affect the home building industry.
Jul 31, 2025
How Home Builders Beat the Labor Crunch with This Fast Financing PlanStruggling to secure labor can force builders to make tough decisions: Do you delay a project? Sacrifice profits? Or turn down new opportunities? But smart builders don’t just react — they adapt their financing strategy to meet labor challenges head-on.
Latest Economic News
Jul 31, 2025
Personal Income Rises 0.3% in JunePersonal income increased by 0.3% in June, following a 0.4% dip in May, according to the latest data from the Bureau of Economic Analysis. The gains in personal income were largely driven by higher wages and social benefits.
Jul 31, 2025
Housing Share of GDP: Second Quarter 2025Housing’s share of the economy registered 16.3% in the second quarter of 2025, according to the advance estimate of GDP produced by the Bureau of Economic Analysis. This reading is unchanged from a revised level of 16.3% in the first quarter and is the same as the share one year ago.
Jul 30, 2025
Fed Remains on Pause AgainAt the conclusion of its July meeting, the Federal Reserve’s monetary policy committee once again held the federal funds rate constant at a top rate of 4.5%. However, two members of the committee dissented from the decision (Fed Board Governors Waller and Bowman), the largest number of dissenting votes since 1993.