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During the pandemic housing boom, we saw red-hot housing demand quickly absorb much of the available slack in the housing market. Back in 2021, active housing inventory for sale, unsold completed new builds, and available lot supply all plunged to historic lows.
But ever since the pandemic housing boom fizzled out in mid-2022, housing slack has been building back up in the housing market—especially in certain pockets of the Sun Belt.
Look no further than Zonda’s New Home Lot Supply Index, which measures lot supply based on the number of single-family vacant developed lots and the rate at which those lots are absorbed via housing starts. A higher index value indicates a greater supply of single-family vacant developed lots, while a lower index value indicates a tighter lot supply/new construction market.
That index reading for Q4 2025 climbed to 81.6—well above the all-time low of 35.8 set at the height of the pandemic housing boom in Q2 2022, when builders were buying as much entitled land as they could find.
According to Zonda, homebuilder lot supply loosened/rose in 28 of the 30 major metro-area housing markets tracked over the past 12 months.
Housing markets like Austin, Atlanta, Denver, Dallas, L.A., Seattle, and Jacksonville, Florida, experienced some of the most significant year-over-year loosening of lot supply.
That said, despite an uptick in available lots in some markets on a year-over-year basis, around half of major housing markets are still what Zonda considers “significantly undersupplied.”
In fact, Zonda now considers Austin and Denver metro-area housing markets as “significantly oversupplied.”
Zonda’s New Home Lot Supply Index has five groupings:
- “Significantly oversupplied” = 125 score or higher
- “Sightly oversupplied” = 115-124 score
- “Appropriately supplied” = 85-114 score
- “Slightly undersupplied” = 75-84 score
- “Significantly undersupplied” = 74 score or lower
One year ago, just three major metro-area 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 reading, and 10 of the 30 markets now fall into the “appropriately supplied” category or higher.
If Zonda had published data for more than 30 markets, my assumption—based on my own analysis—is that many pockets of Southwest Florida (including Cape Coral and Punta Gorda) would have ranked near the top.
“Policy uncertainty, the current cost of living, student loans, labor market concerns, interest rates, home prices, changes to immigration, geopolitics, and more have all slowed consumer demand,” wrote Ali Wolf, chief economist for Zonda and NewHomeSource, on February 9. “When consumers aren’t happy, builders aren’t happy, and that’s exactly what we are seeing in the data. Builders have scaled back starts in response to slower sales, which by extension has allowed for lot supply to grow.”