The New Home Lot Supply Index (LSI) has reached 60.8, indicating a 1.7% decrease from the fourth quarter of 2024 compared to the same period in 2023. That being said, Atlanta has been found to have adequate lot supply, according to a recent report from Zonda, a real estate data services company.

This suggests that the market remains “significantly undersupplied” nationally, a trend persisting since 2017, according to new figures just released in February 2025. However, on a quarter-over-quarter basis, lot supply increased by 5.4% from the third quarter of 2024, reflecting a gradual improvement in availability.

Ali Wolf, chief economist at Zonda, noted, “Land and lot supply is at the healthiest levels we’ve seen in years.”

What Is the New Home Lot Supply Index?

The New Home Lot Supply Index measures the availability of developed lots for new home construction.

A higher index indicates a greater supply of lots, which can support more new home construction, while a lower index suggests a tighter supply, potentially leading to higher home prices and slower construction growth.

Between 2021 and 2022, builders were concerned about a potential shortage of buildable lots due to rapid demand growth. However, lot supply surged in late 2022 and early 2023 as consumer demand softened while lot development continued. Currently, the market is characterized by steady growth in both lot supply and new housing starts.

Lot Supply: A Snapshot of America

Year-over-year, lot supply tightened in most major metropolitan areas during the fourth quarter of 2024, with 17 out of 30 markets experiencing a decrease, down from 22 in the previous quarter.

Notably, Orlando, San Francisco, and Nashville saw the most significant loosening in land supply. In these areas, fourth-quarter housing starts varied compared to the previous year: Orlando experienced a 7% increase, San Francisco a 5% rise, while Nashville saw a 2% decline.

Atlanta Lot Supply Deemed Adequate

Three markets—Austin, Atlanta, and Dallas—are now considered appropriately supplied, while San Antonio remains slightly undersupplied. In the fourth quarter, housing starts increased year-over-year in three of these markets, with Austin being the exception. Vacant developed lots (VDLs) also rose in three markets, excluding Atlanta.

Atlanta Housing Market Trends

Population Growth: Atlanta has been experiencing significant population growth, driven by its strong job market, relatively low cost of living, and quality of life. This growth increases demand for housing.

Housing Demand: The demand for housing in Atlanta has been robust, leading to a competitive market for both existing homes and new construction.

Supply Constraints: Like many growing cities, Atlanta has faced challenges with land availability and zoning regulations, which can impact the New Home Lot Supply Index.

Construction Activity: Despite supply constraints, construction activity has been relatively strong, with developers working to meet the high demand for housing.

Factors Influencing the New Home Lot Supply Index include land availability, which is the amount of available land for development is a critical factor. Urban areas like Atlanta often face limitations due to geographic and regulatory constraints.

Another factor is zoning and regulations. Local zoning laws and building regulations can impact the ability to develop new lots.

Final Word

Total future lots, expected to be delivered over the next 12 to 18 months, increased by 13.2% year-over-year in the fourth quarter of 2024 but declined by 6.7% from the previous quarter. While the annual growth is notable, it’s important to recognize that the fourth quarter of 2023 represented a recent low point in the data. Overall, upcoming lots were 5.7% higher in 2024 compared to 2023 and 14.4% more in the fourth quarter of 2024 than in the same period in 2019.

In summary, while the national lot supply remains undersupplied, recent data indicates a positive trend toward increased availability, offering a more balanced outlook for future housing developments.

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