Share of Smaller Home Lots Reaches New High
A shift in speculatively built (or spec) home building toward smaller lots continued despite the pandemic-triggered suburban flight and presumed shifts in preferences toward more spacious living. The steadily rising share of smaller lots reflects unprecedented lot shortages confronted by home builders during the pandemic housing boom, as well as their attempts to make new homes more affordable.
Close to two thirds (65%) of new single-family detached homes sold in 2023 were built on lots under 9,000 square feet, which is less than one-fifth of an acre. According to the latest Survey of Construction (SOC), this is the highest share on record and reflects stark changes in the lot size distribution over the last two decades. In 1999, when the Census Bureau started tracking these series, less than half (46%) of new for-sale single-family detached homes were occupying lots of that size.
The share of lots smaller than 7,000 square feet (or 0.16 of an acre) reached 40% in 2023 — another record reading. Only 28% of new single-family detached spec homes were built on lots that size in 1999.
A persistent shift towards smaller lots, however, is a more recent phenomenon. The share of lots under one-fifth of an acre was fluctuating around 48% until 2011. It was only during the last decade that the share rose rapidly, from 50% in 2011 to 61% right before the pandemic and gained an additional 4 percentage points during the last four years.

A closer look at the lot size distribution since 2010 shows that most dramatic shifts took place at the lowest end, with lots under 0.16 acres increasing their share by 13 percentage points. In 2010, 27% of all sold single-family detached homes occupied lots under 0.16 acres, and an additional 20% were on lots between 0.16 and 0.25 acres. Fast forward to 2023, these shares increased to 40% and 25%, respectively.
At the other end of the lot size distribution, the share of spec homes built on larger lots exceeding half an acre shrunk from 14% in 2010 to 9% in 2023. The share of lots measuring between one-quarter and half an acre declined from 24% to 18% over that time span.
The Pacific division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.14 acres. The bordering Mountain division also reports typical lots smaller (0.16 acres) than the national median.
The analysis above is limited to single-family detached speculatively built homes. Custom homes built on an owner’s land with either the owner or a builder acting as the general contractor do not involve the work of a professional land developer subdividing a property. Therefore, in the case of custom homes, lots refer to an owner’s land area rather than lots in a conventional sense. Nevertheless, the SOC reports lot sizes for custom homes and shows that they tend to have larger lots. The median lot size for custom single-family detached homes started in 2023 is one acre.
For the regional analysis, the median lot size is chosen over average since averages tend to be heavily influenced by extreme outliers. In addition, the Census Bureau often masks extreme lot sizes and values on the public use SOC dataset making it difficult to calculate averages precisely, but medians (as the midpoint of a frequency distribution) remain unaffected by these procedures.
Natalia Siniavskaia, NAHB assistant vice president for housing policy research, delves into regional differences in this Eye on Housing post.
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