The NAHB/Wells Fargo Housing Market Index (HMI) had a special question included in their September 2021 survey. The question asked builders about the availability of developed lots in their areas. The response indicates that home builders are facing supply side challenges similar to other U.S. industries — the shortage of labor and materials.
However, home builders are facing a unique challenge that the other industries are not. The challenge is finding lots on which to build. In a recent NAHB survey 76% of builders reported that the overall supply of developed lots in their areas as low to very low.
The NAHB noted that they have been collecting the information on lot availability since the 1990’s and this is all-time record low and by a wide margin. The previous record was 65% recorded in 2018.
The NAHB points out that along with the other aforementioned supply chain challenges, these lot supply problems are one of the reasons NAHB’s standard measure of housing affordability has fallen to its lowest level in nearly a decade.
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Lots Harder to Obtain than Ever