New Home Lot Supply Index

May 08, 2025

The New Home Lot Supply Index provides an unrivaled look into the lot markets across the country, offering a current quarter snapshot as well as insight into the directional trend. This report details data for the first quarter of 2025.

The New Home LSI, backed by data from Zonda, showed lot supply loosened both year-over-year and quarter-over-quarter across the United States, notching the third consecutive increase from previous quarters. The index is a residential real estate indicator based on the number of single-family vacant developed lots and the rate at which those lots are absorbed via housing starts.

The New Home LSI came in at 64.3 for 1Q25, representing a 12.1% increase from 1Q24. The 1Q25 data shows a “significantly undersupplied” market nationally. The market has been “significantly undersupplied” since 2017.
On a quarter-over-quarter basis, supply increased by 5.7% from 4Q24.
The LSI counts the total vacant developed lot supply and adjusts it for overall starts activity.

“Today’s housing market is shaped by the intersection of politics, economics, affordability, and consumer sentiment” said Ali Wolf, chief economist for Zonda and NewHomeSource. “The resulting impact is a choppy market, and mixed messages on the lot supply front. Zonda’s LSI in the first quarter came in at the highest level in five years thanks to slower housing starts and more cautious consumers but remained significantly undersupplied.”

Lot supply loosened year-over-year in most major metropolitan areas in 1Q25, with 18 of 30 increasing.

The markets where land supply loosened the most on a year-over-year basis were led by Orlando, San Francisco, and LA/OC. In these markets, 1Q starts were mixed compared to this time last year. Starts were flat in Orlando YOY but down 12% and 11% in San Francisco and LA/OC, respectively.
San Diego tightened the most compared to the same time last year, falling 54% to 13.4, which now makes it the tightest lot market in the country. Government regulation is the top hurdle in San Diego. Miami is the second tightest, with an index value of 13.8 and LA/OC rounds out the top three tightest markets (25.2). These markets have severe geographic and topographical limitations on land and lot development.
The same three markets as last quarter were considered appropriately supplied–Austin, Atlanta, and Dallas–while Minneapolis and San Antonio were slightly undersupplied. 1Q housing starts decreased year-over-year in all five of these markets, and VDLs increased in all but San Antonio (down 3%).

Zonda also records future lots through the stages of development. The stages range from raw land through streets in, which is the last step before the lot becomes a vacant developed lot. Zonda groups the last few stages into a classification called total upcoming lots, which typically indicates delivery over the next 12-18 months. The video below shows the developmental stages from an aerial view.

Total upcoming lots for 1Q25 increased 4.7% year-over-year, and were up 6.5% from last quarter. Additionally, they were up 26.3% compared to the same quarter in 2019.

Among total upcoming lots, roadwork was largely flat year-over-year, down 0.2%. Roadwork is comprised of the two smaller stages–streets paved and streets in–and represents the last step in lot development. Lots in the excavation stage were up 6.7% year-over-year, while those with equipment on site were also up 6.7%.

The largest share of total upcoming lots were in the excavation stage in 1Q25, making up 59% nationally. These lots have an expected delivery between 4Q25 and 1Q26 (the range represents different timeframes from local entitlement processes). Note, not all of the lots in excavation will match Zonda’s estimated timeline.

“There has been a lot of money invested in land and lot development in recent years, and we are seeing the fruit of that labor show up in total upcoming lots,” said Wolf. “The big question now is how aggressive builders will be in the shifting market with housing starts, new community openings, and their land acquisition plans.”

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Methodology

The Zonda New Home Lot Supply Index (LSI) is built on proprietary, industry-leading data that covers the production new home market across the United States. The index values represent single-family vacant developed lot supply, lots that are ready to be built on, relative to equilibrium. Released quarterly, the New Home LSI provides an unrivaled look into the lot markets across the country, offering a current quarter snapshot as well as insight into the directional trend.

The New Home LSI is calculated based on each markets’ specific equilibrium as determined by our team of local experts and historical activity. The comparative current value is adjusted to capture the “true” months of supply figure by applying a greater weight to vacant developed lots in subdivisions with more starts activity. Each index value is associated with a phrase highlighting the current lot supply dynamics. A value of 100, represents perfect equilibrium, while a value of 125 and above equals “Significantly Oversupplied”, 115-125 – “Slightly Oversupplied”, 85-115 – “Appropriately Supply”, 75-85 – “Slightly Undersupplied”, and 75 and below – “Significantly Undersupplied.”

The foundation of the index is a quarterly release conducted by Zonda. It is necessary to monitor residential lot supply to understand how new home markets may be impacted by the incoming pipeline.