Shortages of buildable lots reached a new record low in May, according to a survey of homebuilders within the National Association of Home Builders/Wells Fargo Housing Market Index. Sixty-four percent of builders reported that the supply of lots in their markets was “low” or “very low,” marking the highest percentage of reported shortage since NAHB began collecting such data in 1997.
The lot shortage may be part of the reason why new homes are being built at a rate of under 1.2 million a year. In 2005, when only 53 percent of builders reported a shortage of lots, total housing starts were more than 2 million.
Builders are facing more severe lot shortages in some regions of the country, notably out west. Builders working in the western United States face the highest percentage of shortages at 69 percent reporting “low” or “very low” lot supply. The Northeast was close behind at 68 percent. In the Midwest, 62 percent of builders report a lot shortage problem, while 64 percent in the South had these complaints.
Source: “Shortage of Lots Now Worse Than Ever,” National Association of Home Builder’s Eye on Housing blog (May 23, 2016)
Reprinted from REALTOR® Magazine Online (http://realtormag.realtor.org), May 24, 2016, with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2016. All rights reserved.