More than two-thirds of single-family detached homes sold in 2021 were built on lots smaller than one-fifth of an acre, according to the latest Survey of Construction (SOC). The data suggests that despite the suburban flight and shifts toward more spacious living during the pandemic, the market share of homes built on smaller lots has been increasing, according to the NAHB.
The fact that a shift in speculatively built (or spec) home building toward smaller lots continued during the pandemic undoubtedly reflects unprecedented lot shortages confronted by home builders during the pandemic housing boom, as well as their attempts to make new homes more affordable.
The latest SOC data show that 67% of all new single-family detached homes sold in 2021 were occupying less than one-fifth of an acre. Going back to 1999, when the Census started tracking these data, the share was 46%. A persistent shift toward smaller lots, however, is a more recent phenomenon. The share of lots under one-fifth of an acre was fluctuating around 48%, never crossing the 50% mark, until 2011. In contrast, the share rose rapidly during the last decade, from 50% in 2011 to 61% right before the pandemic and gained additional 6 percentage points during the two pandemic years.
At the other end of the lot size distribution, the share of spec homes built on larger lots exceeding half an acre shrunk from 12% in 2011 to 8% in 2021. The share of lots measuring between a quarter and half an acre declined from 24% to 17% over the last 10 years.
While the nation's production of spec homes shifts toward smaller lots, the regional differences in lot sizes persist. Looking at single-family detached spec homes started in 2021, the median lot size in New England is four times as large as the national median.
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