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During the pandemic housing boom, we saw the red-hot demand for housing quickly gobble up much of the available space in the housing market. In 2021, active housing inventory for sale, unsold completed new construction, and the supply of available lots all fell to historic lows.
But since the pandemic housing boom subsided in mid-2022, the housing market has returned to a shortage — especially in certain parts of the Sun Belt.
Look no further than Zonda’s New Home Lot Supply Indexwhich measures lot supply based on the number of vacant developed lots for single-family homes and the rate at which those lots are absorbed through housing. A higher index value indicates a greater supply of vacant building plots for single-family homes, while a lower index value indicates a tighter supply of plots/new construction market.
That index value for the fourth quarter of 2025 rose to 81.6 — well above the all-time low of 35.8 at the height of the pandemic housing boom in the second quarter of 2022, when builders bought as much land as they could find.
According to ZondaHomebuilder supply has decreased/increased in 28 of the top 30 metropolitan housing markets over the past 12 months.
Housing markets such as Austin, Atlanta, Denver, Dallas, LA, Seattle and Jacksonville, Florida, saw some of the most significant easing on a year-over-year basis in lot supply.
That said, despite an increase in the number of available lots in some markets year-over-year, about half of major housing markets are still “significantly undersupplied,” according to Zonda.
In fact, Zonda now considers the housing markets in the Austin and Denver metro areas to be “significantly oversupplied.”
Zonda’s New Home Lot Supply Index has five groups:
- “Significant oversupply” = 125 score or higher
- “Slightly oversupply” = 115-124 score
- “Properly provided” = score 85-114
- “Slightly undersupplied” = 75-84 score
- “Significant undersupply” = 74 score or lower
A year ago, only three major urban housing markets were “appropriately supplied” in terms of lot/land supply – Austin, Atlanta and Dallas – and none were classified as “slightly oversupplied” or “significantly oversupplied.”
Fast forward to the latest state of affairs, and ten of the thirty markets now fall into the ‘appropriately delivered’ category or higher.
If Zonda had published data for more than thirty markets, I’m guessing—based on my own analysis—that many parts of Southwest Florida (including Cape Coral and Punta Gorda) would have been near the top.
“Policy uncertainty, the current cost of living, student loans, labor market concerns, interest rates, home prices, immigration changes, geopolitics and more have all slowed consumer demand.” wrote Ali Wolf, chief economist at Zonda and NewHomeSource, on February 9. “If consumers aren’t happy, builders aren’t happy, and that’s exactly what we’re seeing in the data. Builders have scaled back starts in response to slower sales, allowing lot supply to grow.”
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