Austin, Atlanta, and Dallas boast 'appropriately supplied' lot inventory—L.A. and Philly homebuilders still struggle to find lots

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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 and Mountain West.

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 in Q2 2025 climbed to 68.4—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 22 of the 30 major metro area housing markets tracked over the past 12 months.

Housing markets like Tampa, Austin, Nashville, and Charlotte 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, most housing markets are still what Zonda’s considers “significantly undersupplied.”

Zonda’s New Home Lot Supply Index has 5 groupings:

• “significantly oversupplied” = plus 125 score

• “slightly oversupplied” = 115-125 score

• “appropriately supplied” = 85-115 score

• “slightly undersupplied” = 75-85 score

• “significantly undersupplied” = below 75 score

According to Zonda, three major metro area housing markets now are “appropriately supplied” for lot/land supply: Austin, Atlanta, and Dallas.

Note: If Zonda had analyzed more than 30 markets, the count would likely have been higher than just three—especially in some softer pockets of SWFL.

This week, the ICE Home Price Index reported its July reading, which showed year-over-year U.S. home price growth slowing from +1.3% to +1.0%.

Depending on the index, the year-over-year figure will always vary. However, directionally, they (nationally aggregated home prices) tend to move the same way—and right now, that direction is softening/deceleration.