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LAND AND LOT SUPPLY: HEALTHIEST LEVEL IN YEARS

—New Home Lot Supply Index Up for the Fourth Consecutive Quarter—

NEWPORT BEACH, Calif., Aug. 12, 2025 /PRNewswire/ -- Zonda's New Home Lot Supply Index (LSI) for 2Q25, showed lot supply loosened both year-over-year and quarter-over-quarter across the United States, notching the fourth consecutive increase from previous quarters.

The index is a residential real estate indicator of the number of single-family vacant developed lots and the rate the lots are absorbed via housing starts. (▶️See the lot development stages)

"The timing of land and lot deliveries is a growing challenge in today's housing market," said Ali Wolf, chief economist for Zonda and NewHomeSoure. "While builders had planned to increase housing starts in 2025, they slowed production as the year progressed due to choppy consumer demand and rising resale supply. This slower pace of construction contributed to the 5-year high in Zonda's LSI, as fewer lots were converted into starts."

The New Home LSI came in at 68.4 for 2Q25, representing a 20.6% increase from 2Q24. The 2Q25 data shows a "significantly undersupplied" market nationally. The market has been "significantly undersupplied" since 2017.
On a quarter-over-quarter basis, supply increased by 6.3% from 1Q25.
The LSI counts the total vacant developed lot supply and adjusts it for overall starts.
Despite the loosening trend, lot inventory was still categorized as "significantly undersupplied" in most markets in 2Q25.

"The land and lot backdrop reveals a key insight: we don't have a glut of supply, but the market is ready to support more construction once builders feel confident again," said Wolf.