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
Oct 02, 2025
Vermont Executive Order Addresses Builders' Top PrioritiesTwo Vermont Builders and Remodelers Association members stood with Gov. Phil Scott as he signed an executive order to address regulatory barriers, permitting challenges and energy code standards in the state.
Oct 01, 2025
Get National Resources for Local Issues with NAHB's Legal Action FundNAHB’s Legal Action Fund provides support for members facing critical legal challenges that directly impede their ability to develop land and build homes. The current deadline to apply for support is October 28.
Latest Economic News
Oct 01, 2025
Consumer Confidence Drops on Job ConcernsConsumer confidence fell to a five-month low as consumers remain concerned about reignited inflation and a weakening labor market amid economic uncertainty. The labor market differential, which measures the gap between consumers viewing job as plentiful and hard-to-get, has narrowed for nine straight month and is now at lowest level since March 2021.
Sep 30, 2025
Construction Labor Market SoftensThe count of open, unfilled positions in the construction industry decreased in August, per the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). The decline occurred as home building weakened in 2025.
Sep 29, 2025
Characteristics of Homes Built in Age-Restricted CommunitiesIn 2024, approximately 43,000 homes were built in age-restricted communities, representing just over 3% of all housing starts. According to the Census Bureau’s Survey of Construction, roughly three-quarters of these homes (32,000) were single-family units.