US Single-Family Lot Sizes Continued to Shrink and Cost More in 2022, but Trailed Inflation Rates

The National Association of Home Builders’ (NAHB) analysis of the Census Bureau’s Survey of Construction (SOC) data reveals that lot values for single-family detached spec homes continued to increase in 2022. The value of lots increased in six out of nine Census divisions and set new nominal records. According to the SOC, the US median lot value for a single-family detached for-sale home started in 2022 was $56,000.

The NAHB notes that even though lot values continued to rise across most regions, overall US inflation averaged 8% in 2022 and outpaced lot appreciation in all divisions, except the East North Central and South Atlantic where lot values increased even in real terms (adjusted for inflation). In the East North Central division, lot values surged 42% and reached a new historic high, in both real and nominal terms.

The fact that lot values keep rising as their size shrinks reflects ongoing challenges builders are facing to obtain lots, the NAHB says. Even though lot shortages are not quite as acute and widespread as they were in 2021, their current incidence reported by the May survey for the NAHB/Wells Fargo Housing Market Index (HMI) is the second highest on record since the NAHB began collecting this information is 1997.