The supply of developed lots are either low or very low, according to 65 percent of builders surveyed by the National Association of Home Builders, indicating a one percent annual gain.
According to the NAHB's analysis, housing starts have only recovered in part since the last recession, and is having a strong impact on lot supply. "After averaging 1.5 million from 1960-2007 and hitting a peak of 2.0 million in 2005, starts have recovered only to about 1.2 million a year. The continued low supply of developed lots is a hindrance to a fuller housing recovery, and helps explain some of the recent weakness in new home sales." In the most desirable locations, 31 percent of builder respondents say that lot supply is very low.
The survey consisted of special questions appended to the instrument for the NAHB/Wells Fargo Housing Market Index (HMI) in September 2018. Sixty-five percent is the largest low supply percentage recorded since NAHB began periodically asking the question in the HMI survey in 1997. The 65 percent includes 43 percent who characterized the supply of lots simply as low and 22 percent who said the supply of lots was very low.
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