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New Home Lot Supply Index Reveals Strong Market Trends

The latest data from Zonda reveals substantial growth in the New Home Lot Supply Index (LSI) for the second quarter of 2025. As we enter mid-August, the report showcases a notable increase in available housing lots across the United States, marking the fourth consecutive upward trend.

Overview of the New Home Lot Supply Index

According to the LSI, there has been a year-over-year and quarter-over-quarter loosening of lot supply. It indicates that the market is currently experiencing a 20.6% increase compared to the previous year and a 6.3% increase from the first quarter of 2025. This data emphasizes the ongoing dramatic shifts in the housing landscape, particularly as builders respond to fluctuating consumer demand and an increase in available resale properties.

Ali Wolf, the chief economist for Zonda and NewHomeSource, elaborated on these developments, mentioning the timing of land deliveries as a growing issue within today’s housing market. Although construction was anticipated to gain momentum in 2025, builders have opted for a more cautious approach, slowing down the pace of new home starts due to varying levels of consumer interest and a rise in resale housing supply. This hesitancy has resulted in fewer lots being transitioned into new builds, contributing to a five-year high in the LSI.

Current Market Conditions

Despite the recent increases in lot supply, the market remains significantly undersupplied. For almost a decade since 2017, the U.S. has been dealing with an undersupplied housing market, and the current data confirms that lot inventories are still widely categorized as such. This indicates a persistent opportunity for construction development once builders regain confidence in consumer purchasing behavior.

Wolf's insights suggest that while there isn’t an oversupply situation, there’s a clear indication that the market is poised for further construction activity once builders feel assured about demand trends. Homebuyers searching for new properties can rely on NewHomeSource for comprehensive information and resources to navigate the current marketplace.

Key Highlights from the Index

• - LSI Value: The New Home LSI is noted at 68.4 for Q2 2025.
• - Market Scenario: Despite a loosening supply, the national market continues to remain undersupplied, presenting opportunities for builders eager to engage in the market as consumer confidence stabilizes.
• - Construction Schedule: Builders must navigate choppy consumer demand as the fluctuating landscape critically influences their construction timelines. The role of land and lot supply will be crucial in stimulating growth as we progress through 2025.

Conclusion

The data emerging from Zonda’s analysis provides extensive insight for stakeholders in the housing market. With new construction needed to address market demands, understanding the dynamics of lot supplies is vital for builders and homebuyers alike. Zonda continues to be at the forefront of this analysis, providing essential insights for the homebuilding industry. To learn more, visit NewHomeSource.com.

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For further analysis, insights, and upcoming Zonda events, such as the Mortgage Playbook Webinar on September 9 and Future Place from October 27-29, check the detailed engagement announcements.

Zonda remains dedicated to revolutionizing the homebuilding industry by providing data-driven solutions that help enhance the quality of construction and improve community living standards. Through partnerships with homebuilders, product manufacturers, and committed engagement with clients, Zonda aims to create better homes for a brighter future.