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recent report from Zonda, a housing market research firm, shows that the supply of single-family lots in the US has continued to loosen, marking its third consecutive quarterly increase and reaching a five-year high. According to Zonda's New Home Lot Supply Index (LSI), the index rose to 64.3 in Q1 2025, representing a 12.1% year-over-year increase and a 5.7% gain from the previous quarter.

    Despite this upward trend, the market remains significantly undersupplied, a designation it has held since 2017. The LSI measures vacant developed lots in relation to new housing starts, providing a critical gauge for builders, developers, and policymakers monitoring the supply-demand balance in residential real estate.

    Ali Wolf, chief economist for Zonda and NewHomeSource, notes that the current market is shaped by intersecting factors such as politics, economics, affordability, and consumer sentiment. The resulting impact is a choppy market with mixed messages on lot supply.

    Wolf highlights progress being made despite the tight market. Slower construction activity and more cautious buyer behavior have extended the shelf life of available lots, contributing to the increase in available lots. Upcoming lot supply also showed positive growth, rising 4.7% compared to Q1 2024 and 6.5% from the previous quarter.

    Notably, upcoming lot inventory is now 26.3% higher than in Q1 2019, indicating that recent land development investments are yielding results. Wolf emphasizes that the question now is how aggressive builders will be in the shifting market with housing starts, new community openings, and their land acquisition plans.

    As the real estate sector navigates ongoing uncertainties in affordability and demand, Zonda's data will continue to play a central role in helping industry stakeholders adapt their strategies.