U.S. Single-Family Detached Homes Continue to be Built on Smaller Lots

A closer look at the latest U.S. Census Bureau’s Survey of Construction (SOC), with additional analysis provided by the National Association of Home Builders (NAHB) reveals that 65% of new single-family detached homes sold in 2023 were built on lots under 9,000 square feet, which is less than 1/5 of acre.

The NAHB points out that this is the highest share on record and reflects stark changes in the lot size distribution over the last two decades. In 1999, when the Census Bureau started tracking these series, less than half (46%) of new for-sale single-family detached homes were occupying lots of that size.

The NAHB notes a shift in speculatively built homes, building towards smaller lots continued despite the pandemic-triggered suburban flight and presumed shifts in preferences towards more spacious living. The steadily rising share of smaller lots undoubtedly reflects unprecedented lot shortages confronted by home builders during the pandemic housing boom, as well as their attempts to make new homes more affordable.

A look at the lot size distribution since 2010 shows that most dramatic shifts took place at the lowest end, with lots under 0.16 acres increasing their share by 13 percentage points. In 2010, 27% of all sold single family detached homes occupied lots under 0.16 acres and an additional 20% were on lots between 0.16 and 0.25 acres. Fast forward to 2023, these shares increased to 40% and 25%, respectively.

The median lot size of a new single-family detached home sold in 2023 now stands at 8,400 square feet, or just under one-fifth of an acre. This is slightly larger but statistically not different from the lowest on record median of 8,177 square feet set a year before the COVID-19 pandemic.