It’s getting hard to find lots to build homes on – and that’s keeping the U.S. housing market from returning to full health, according to a new NAHB survey.
"In our August 2013 survey, 59 percent of builders reported that the supply of lots in their markets was low or very low -- up from 43 percent September of last year, and the largest low supply percentage we've seen since we began conducting these surveys in 1997," said National Association of Home Builders Chief Economist David Crowe. "One reason is that many residential developers left the industry, abandoned certain markets or simply stopped buying land and developing lots during the downturn."
The lot shortage is most acute in highly desirable communities, according to the survey. Thirty-four percent of builders said that the supply of “A” location lots was very low, while for B- and C-quality locations, only 18 percent and 12 percent of builders, respectively, made a similar comment.
"There is still a substantial pent-up demand for housing waiting to be unleashed as the overall economy and labor situation improves," Crowe said. "Lot shortages are one of several barriers that have arisen, restraining builders from responding completely to increased demand. Other barriers include a shortage of labor in carpentry and other key building trades, limited availability of loans even for credit worthy home builders and home buyers; and, more recently, an uptick in interest rates."