Builders Shift Toward More Compact Lots in 2024 as Shortages Bite

Washington, DC, July 15, 2025-In 2024, most new single‑family detached homes sold in the U.S. sat on increasingly smaller parcels, marking the continuation of a multi‑year trend toward compact "spec" construction, according to a new analysis by the National Association of Home Builders (NAHB) of U.S. Census Bureau data.

Two out of three (about 67%) newly built, speculative single-family homes were sold on lots of 9,000 square feet or less (roughly one‑fifth of an acre), while 40% were on lots under 7,000 square feet (around one‑sixth of an acre), NAHB reported. These shares match record levels first reached in 2023.

In 1999, less than half of all new single‑family homes were built on lots this small (~46%), and the share remained below 50% until 2011. According to NAHB, the percentage of spec homes built on small lots rose sharply after the Great Recession-from 47% in 2010 to 61% just before the pandemic-and has continued climbing, reaching 67% in 2024.

The most notable growth occurred at the smallest lot sizes: homes on lots below 7,000 square feet increased from 27% in 2010 to 40% last year. Meanwhile, larger lots have steadily declined in share. Lots over half an acre dropped from 14% to 9%, those between a quarter and a half acre fell from 24% to 19%, and 1/5-1/4 acre lots decreased from 15% to 7%, according to NAHB’s analysis.

The median lot size for new single-family homes sold in 2024 was 8,506 square feet, slightly above 2023’s record low of 8,177 square feet, but statistically unchanged, NAHB said.

Regional differences remain stark. In New England, stricter zoning regulations mean half of new homes are still built on lots exceeding 0.6 acres. By contrast, the Pacific region-home to higher land costs and denser development-saw a median lot size of just 0.13 acres (around 5,700 square feet). Similar patterns were seen across the Mountain and West South Central divisions, according to NAHB.

NAHB analysts attribute the national trend not to consumer preference but to shrinking lot availability and rising land costs. Builders are increasingly turning to smaller parcels to keep homes affordable and deliver more product in constrained markets.

Custom homes, which are built on land already owned by the buyer, remain an exception. In 2024, the median lot size for these projects was a full acre, much larger than the median for spec-built homes, NAHB found.