New data from Zonda shows the national lot market is officially back in balance for the first time since 2016. But that headline number is hiding a split almost as sharp as the one in home prices. Austin, Atlanta, and Denver are now swimming in buildable lots, while builders in L.A. and Philadelphia are still fighting to find land.
Quick takeaways
- The national lot supply index hit 85.2 in Q2 2026, landing in the “appropriately supplied” range for the first time since 2016.
- Denver, Austin, and Atlanta have flipped all the way into “significantly oversupplied” territory, a fast reversal from 18 months ago.
- Lot supply loosened in 27 of the 30 major metros tracked over the past year, but roughly half still rank as undersupplied.
- Builders in L.A. and Philadelphia are still hunting for land. The national number won’t tell you what’s happening in your metro.
How tight is the national lot market right now?
The tightest point was 2022. That’s no longer the story.
Zonda tracks lot supply through its New Home Lot Supply Index, which measures the number of single-family vacant developed lots against the rate builders absorb them through housing starts. A higher score means more available lots relative to demand. A lower score means a tighter market.
That index bottomed out at 35.8 in Q2 2022, at the height of the Pandemic Housing Boom, when builders were snapping up every entitled lot they could find. According to ResiClub’s analysis of the latest Zonda data, that same index climbed to 85.2 in Q2 2026. That puts the national market in the “appropriately supplied” band for the first time since 2016.
Zonda breaks its index into five tiers:
- Significantly oversupplied — 125 or higher
- Slightly oversupplied — 115 to 125
- Appropriately supplied — 85 to 115
- Slightly undersupplied — 75 to 85
- Significantly undersupplied — below 75
Which markets flipped from scarce to oversupplied?
Denver, Austin, and Atlanta made the fastest turnaround.
Eighteen months ago, only three of the 30 major metro markets Zonda tracks (Austin, Atlanta, and Dallas) were even in the “appropriately supplied” range. None were oversupplied. Today, 12 of those 30 markets sit at “appropriately supplied” or higher, and Denver, Austin, and Atlanta have moved all the way into “significantly oversupplied” territory.
Lot supply loosened in 27 of the 30 markets over the past 12 months. Austin, Atlanta, Denver, Dallas, Seattle, and Jacksonville saw some of the sharpest loosening on a year-over-year basis.
Where land is still hard to find
L.A. and Philadelphia haven’t caught the same break.
A market can loosen year-over-year and still rank undersupplied overall. Roughly half of the 30 major markets Zonda tracks still fall into “slightly” or “significantly undersupplied” territory. L.A. and Philadelphia are two of the markets where builders are still working hard to find enough lots, even after a year of national improvement.
Two builders in two different metros can be looking at completely different land markets right now, even if both are technically working in an “improving” environment. Your metro’s individual score is the number to watch.
What this means for your land and capital strategy
Lot supply now varies as much as pricing does.
Where your project sits on Zonda’s index should shape how you approach land, pricing, and financing for the rest of 2026.
- Check your metro’s lot supply score. An 85.2 national reading can still sit on top of markets running well above or below that line.
- In an oversupplied market, expect more negotiating room on land, but also more competition on the exit. More available lots usually means more builders chasing the same buyers.
- In an undersupplied market, lock up entitled lots early. Land costs tend to hold firmer where supply stays tight.
- Talk to your lender about how local lot conditions affect your draw schedule and contingency planning. A market with scarce land carries different timeline risk than one with abundant supply.
The land market hasn’t fully normalized. The slack that disappeared during the Pandemic Housing Boom is coming back unevenly, and builders who know where their market sits on that curve will make sharper decisions on land and financing.
Frequently Asked Questions
How tight is the national lot supply right now? Zonda’s New Home Lot Supply Index hit 85.2 in Q2 2026, putting the national market in the “appropriately supplied” range for the first time since 2016.
Which markets have the most oversupplied lots? Denver, Austin, and Atlanta have moved into “significantly oversupplied” territory, a score of 125 or higher on Zonda’s index.
Which markets still have tight lot supply? Roughly half of the 30 major metros Zonda tracks remain “slightly” or “significantly undersupplied.” L.A. and Philadelphia are among the markets where builders are still struggling to find enough lots.
What does this mean for construction loan underwriting and land strategy? Builders should base land and financing decisions on their specific metro’s lot supply conditions rather than the national average. A market with loosening supply overall can still have individual metros running tight, which affects land costs, timelines, and how much contingency to build into a project.
Building with CoFi Lending
CoFi works with builders, developers, and brokers across a wide range of markets, and we structure financing around your project’s actual land conditions in your specific metro. If you want to talk through how current lot supply in your market affects your next build, reach out to our team.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a commitment to lend, or a guarantee of specific loan terms. Actual rates, terms, and approvals depend on individual borrower qualifications, project characteristics, and market conditions.
