Lot Shortages Worse Than Ever According to NAHB Survey
Lot availability hit a record low according to data released May 26 from the National Association of Home Builders. Sixty-four percent of builders responding to special questions in the May NAHB/Wells Fargo Housing Market Index reported that the supply of lots in their markets was “low” or “very low”—up from 62 percent last year, and the highest that number has been since NAHB began collecting this data in 1997.
Notably, this record shortage comes at a time when new homes are being started at a rate of under 1.2 million a year. In 2005, when total housing starts were over 2 million, the share of builders reporting a shortage of lots was 53 percent.
“The lack of availability of buildable lots has quickly become one of the biggest issues facing our members,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “While labor shortages and regulatory burdens remain struggles as well, lot shortages are preventing our builders from responding to growing demand for housing.”
The survey results varied somewhat, based on region of the country, size of builder, and type of lot. The dearth of developed lots is most apparent in the Western regions of the country, where 39 percent of builders said lot supply was “very low,” compared to 23 percent in the South and 18 percent in both the Midwest and Northeast. When referring to premium “Class A” category lots, builders in all regions reported similar opinions of widespread shortages.
For more information on this study, visit http://eyeonhousing.org/2016/05/shortage-of-lots-now-worse-than-ever/.