Land Subdivision NAICS 237210

Sep 7, 2025 - Single-Family Lot Shortage Persists

• While the availability of lots for building single-family homes has improved since the pandemic, lot shortages remain a challenge for builders, according to the National Association of Home Builders (NAHB). In a recent NAHB survey of builders, 64% reported coping with some level of shortage, with 38% saying lot supplies were “low” and 26% saying they were “very low.” The share of builders reporting shortages peaked in 2021 at 76%, about a year into the pandemic. However, the percentage of builders experiencing lot shortages has remained above 60% since 2015. In addition to the scarcity of available lots, builders continue to face other stubborn headwinds, including high materials costs, tight credit availability, and attracting enough skilled labor.
• New single-family home sales fell 0.6% month-over-month and were down 8.2% year-over-year in July 2025, according to the US Census Bureau. July’s total new home sales reached 652,000 units. However, home sales beat analysts’ outlook; economists polled by Reuters had expected July sales to reach only 630,000 units. The Chairman of the Federal Reserve has hinted at a possible rate cut during the central bank’s meeting in September. However, Fed rate policy will likely depend heavily on August employment and inflation data due in September. High mortgage rates continue to outpace wage growth, keeping home purchases out of reach for many would-be buyers. Some industry watchers expect new home sales to remain under pressure from interest rates through the end of the year.

• In the second quarter of 2025, there were about 12,000 single-family built-for-rent (SFBFR) housing starts in the US, down 52% from the same period in 2024, according to National Association of Home Builders analysis of US Census Bureau data. During the four most recent quarters, 71,000 SFBFR homes began construction, down 16% compared to how many were built in the previous four-quarter period. While the historical four-quarter moving average market share for SFBFR is about 2.7% (1992-2012), SFBFR’s current share of the overall single-family market is about 7%. Single-family built-for-rent homes provide an alternative for consumers who want more space but are challenged by a lack of affordable housing inventory and downpayment requirements in the for-sale market. However, SFBFR housing starts have slowed as high financing costs have reduced development activity.
• Construction firms that work on civil infrastructure projects are holding steady as they manage uncertainties, including waning backlog growth and weaker margins, according to FMI’s third-quarter Civil Infrastructure Construction Index (CICI) survey. The CICI reading for the third quarter was 50.8 compared to 52.2 in Q2 2025 – on a 100-point scale. Any CICI reading above 50 indicates that more civil infrastructure contractors see conditions as good than poor. While about 52% of firms surveyed said their work backlogs had risen in Q3 2025 compared to a year earlier, only 25% expected backlog growth in Q4. While civil infrastructure firms expect backlogs to ease, margins remain under pressure from competitive bidding and higher costs. FMI expects firms to focus on project selection and cost controls to improve margins, as higher work volumes are a less reliable profitability boost.