Why Rising Lot Prices Spell Trouble for the Future of Affordable Housing
Lot prices are on the rise, outpacing inflation and increasing even outside of traditionally expensive areas. To see a decent return on their projects, home builders are incentivized to focus efforts on two words: large and luxury. But where does that leave entry-level homes?
It’s costing real-estate developers a pretty penny to purchase lots for single-family homes. And that could spell trouble for people who are struggling to afford to buy a home.
A new analysis of U.S. Census Bureau data conducted by the National Association of Home Builders found that the median price for a single-family lot of land had risen 4.4% in 2018, higher than the 2.4% average rate of inflation last year.
Half of the lots nationwide now sell at or above $49,500, researchers found.