NAHB survey: Lot shortages hit record low

[Washington] Lot availability hit a record low according to new data from the National Association of Home Builders (NAHB). 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."

NAHB chief economist Robert Dietz added, "We have monitored lot availability for the last two decades, and it is clear that the scarcity of building lots is growing. Whether due to land use policy, geographic constraints or other regulatory constraints, the lack of lots for residential construction will have negative impacts on housing affordability in many markets."