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Builders Reporting Developed Lot Shortages

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Planning + Development

Builders Reporting Developed Lot Shortages

Along with labor and material shortages, home builders are struggling to find available lots


October 26, 2021
Vacant lot
Photo: Eli Pousson

While labor and material shortages are creating drawn-out obstacles for home builders, a low supply of developed lots across the U.S. is also delaying housing starts, the NAHB’s Eye on Housing reports.

A recent survey conducted by the NAHB found that 76 percent of builders reported low to very low supply of developed lots in their respective areas, a record high supply shortage since the NAHB first began collecting data in the 1990s.  

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

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 percent for “B” lots and 57 percent for “C” lots.  All three percentages are at record highs, however, indicating that lot supply problems are historically widespread irrespective of the desirability of the locations.

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