A growing shortage of lots for new homes will push up home prices in many U.S. markets.
That’s the word from the National Association of Home Builders (NAHB), which says the availability of new-home lots is at a historic low. In the NAHB/Wells Fargo Housing Market Index survey for May, 64 percent of home builders reported the supply of new-home lots in their areas was “low” or “very low.” That’s the highest percentage since NAHB started collecting this data in 1997. “As long as the supply remains constrained and demand remains strong, new-home prices will continue to rise,” says David Brown, regional senior vice president at Metrostudy, which tracks U.S. housing trends. In April 2016, the average price of a new home in the U.S. was $379,800, up 13.5 percent from April 2015, according to NAHB. Brown attributes the lot shortage to a tight market for real estate loans and high land prices in popular areas.