While Lot Sizes Continue to Shrink, Data Show They Are Growing in Value

Lot values for single-family speculative homes are continuing to climb, hitting a new peak in 2023. According to the National Association of Home Builders’ Eye On Housing blog, the median lot value for speculative homes in the U.S. at the start of 2023 was $58,000. At the same time, there has been a significant shift toward smaller lot sizes in recent years. The proportion of lots smaller than one-fifth of an acre has increased from 48% in 2005 to 65% in 2023.

The fact that lot values keep rising as their sizes shrink reflects ongoing challenges builders face in obtaining lots. Even though lot shortages are not quite as widespread as they were in 2021, their current incidence recorded by the May 2023 survey for the NAHB/Wells Fargo Housing Market Index (HMI) is the second highest on record since NAHB began collecting this information in 1997.

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