More than 40% of new single-family detached homes sold in 2022 were built on lots under 7,000 square feet, the highest share on record. The share of lots smaller than 1/16 of an acre represents a significant change since the Census Bureau began tracking lot sizes, according to an analysis by the NAHB. Over 20 years ago, the share of homes sold on lots under 7,000 square feet was 28%.
The fact that a shift in speculatively built (or spec) home building toward smaller lots continued despite the pandemic-triggered suburban flight and presumed shifts in preferences toward more spacious living 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.
Aggregating up and including all lots smaller than one-fifth of an acre brings the share close to 68%. In sharp contrast, less than half (46%) of new single-family detached spec homes were built on lots of that size in 1999, when the Census started tracking these data.
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. It was only during the last decade that the share rose rapidly, from 50% in 2011 to 61% right before the pandemic and gained additional 6 percentage points during the last three 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 2022. The share of lots measuring between a quarter and half an acre declined from 24% to 17% over that time span.
The median lot size of a new single-family detached home sold in 2022 now stands at 8,524 square feet, or just under one-fifth of an acre. This is slightly larger but statistically not different from the lowest on record median of 8,177 square feet set a year before the Covid-19 pandemic.
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