Lot Shortage Sidetracks New Home Construction

A National Association of Home Builders (NAHB) survey reveals a shortage of buildable lots is contributing to the lack of a more robust housing market recovery. “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 NAHB 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 shortage of lots leads to a higher price for the lots, which is ultimately passed on to the home buyer, further stymying a fuller recovery. Housing starts bottomed out at 550,000 in 2009, and has risen to just under 900,000 annually according to the Census Bureau. MHProNews has learned starts averaged 1.5 million from 1960 to 2000, always above the one million mark until 2008.

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