The supply of land available for new homes is finally starting to loosen — a shift many buyers have been waiting years to see. While lot supply isn’t something most shoppers think about directly, it plays a major role in how many homes get built, how quickly communities open, and how many choices buyers ultimately have.
Why Lot Supply Matters to You
Every newly built home starts with a finished lot. When lot supply becomes too tight, builders have fewer places to build, which can slow construction, limit inventory, and push prices higher.
Recent data shows national lot supply has improved for six straight quarters, marking the strongest reading since 2017. For buyers, improving lot availability is often an early signal that more new home options may be coming to market over time.
Why Lot Supply Is Improving
Builders have taken a more cautious approach in the current environment. Higher living costs, elevated mortgage rates, and softer demand have led many builders to slow the pace of new housing starts.
As a result, finished lots are accumulating faster than homes are being built on them. For buyers, this can translate into increased future supply, as more available lots eventually lead to more homes being built.
Some Markets Remain Tight While Others Are Opening Up
Even with improvement at the national level, local conditions vary. Markets such as Miami and San Diego continue to experience tighter lot supply. Meanwhile, Los Angeles/Orange County, San Francisco, and Denver are among the markets where lot availability is loosening more quickly.
In some cases, markets like Austin and Denver now have more than enough lots available — something not seen in many top metros since 2017. For buyers in these areas, that could mean more communities opening and greater availability in the coming years.
Should Buyers Expect More Choices Soon?
In many markets, the answer is yes — but gradually. Early-stage land development is continuing, though builders are moving carefully and avoiding overbuilding while demand remains uncertain. At the same time, many are preparing for a future rebound in buyer activity.
For buyers, this environment often leads to more communities opening and improved availability of homesites over time. If you’ve been waiting for a wider selection of homes, the next 12 to 18 months could bring more options to market.
The insights in this article were taken from Zonda’s more in-depth New Home Lot Supply Index, which is released on a quarterly basis.
