That’s how much a measure of the supply of vacant home lots around the country has dropped in the last year, reaching a new low as demand for new homes surges.
The New Home Lot Supply Index fell to 49 in the first quarter from 64.6 in the same quarter of 2020 after a sharp dropoff in recent months, according to housing market research firm Zonda, which calculates the index. The supply of ready-to-build-on single-family lots tightened in 29 of the 30 select markets that Zonda tracks, with Los Angeles, San Diego, and Baltimore being the worst off.
The housing market has been on fire during the pandemic, with demand outstripping supply as people stuck at home have yearned for more space to live and work. Fierce competition for the depleted inventory of existing homes has put even more pressure on builders, but shortages of ever-more-expensive raw materials are slowing the pace of building. A lack of available land and labor are two other major headwinds likely to continue to drive prices higher, according to the National Association of Home Builders.
“The race to acquire lots is on as builders continue working to quickly get more homes on the ground,” said Ali Wolf, chief economist at Zonda, in a recent statement.
An index value of 100 represents perfect equilibrium between the supply and demand, Zonda said, with any number 75 or below reflecting a market that’s “significantly undersupplied.”