According to NAHB's analysis of Census Bureau Survey of Construction (SOC) data, land prices for single-family homes continue to rise, reaching an all-time high nationwide in 2023. The median U.S. land price for sale for single-family homes started in 2023 was $58,000, with half of the land values valued above the median and the other half valued below the median.
While land prices continue to rise, the 2023 U.S. national inflation rate averages 4.1%, outpacing land price increases. Adjusted for inflation, the median land price is below the record levels of the 2005-2006 housing boom, when half a ton of land was worth more than $43,000, which is roughly the equivalent of $65,000 in inflation-adjusted 2023 dollars.
It's important to keep in mind that new home construction has shifted dramatically to smaller lots in recent years. Since the 2005-2006 housing boom, the percentage of lots smaller than 1/5 acre has increased from 48% in 2005 to 65% by 2023. So, while today's median lot price is not substantially the highest it's ever been, it does reflect a very different mix of lots compared to the housing boom era or even a decade ago.
The fact that land values continue to rise while land sizes are shrinking reflects the ongoing challenges builders face in acquiring land. While land shortages are not as widespread as they were in 2021, the current incidence of land shortages recorded in the May 2023 NAHB/Wells Fargo Housing Market Index (HMI) survey is the second highest on record since 1997, when NAHB began collecting this information.
There is a large variation in land values and valuations across regions of the United States. New England has been the region with the most expensive land for decades. Recently, it has been in a league of its own, with its 2023 median land price being more than three times the national average. According to the latest SOC data, half of all single-family residential (SFD) spec homes started in New England in 2023 were built on lots valued at more than $200,000. New England is known for its strict local zoning regulations that often mandate very low density. As a matter of fact, the median land area for single-family homes started in New England in 2023 was almost three times the national average. It is therefore not surprising that the typical SFD spec home in New England is built on the largest and most expensive lots in the country.
Although Pacific lots are the smallest, the median lot price will reach $147,000 in 2023, the second highest median price in the nation. As a result, Pacific lots stand out as the most expensive in the nation in terms of cost per acre.
In the neighboring Mountain District, half of the SFD spec lots sold for more than $90,000, setting a new record, making Mountain District lots the third most expensive in the United States.
The East Southcentral and South Atlantic regions are home to some of the least expensive spec home sites in the country. East Southcentral recorded the lowest median lot price, with half of the SFD spec homes starting in 2023 recording lot prices below $46,000. Typical lots here are significantly larger than the national median, making them some of the most economical lots in the U.S., as well as the lowest cost per acre lots. Neighboring South Atlantic is the only other region with a median lot price ($49,000) below the national median of $58,000.
Land in the south-central west, which includes Texas, has appreciated significantly in value over the past decade. In 2012, half of SFD's spec homes were started on lots for $30,000 or less, half the current median price of $61,000.
For this analysis, median parcel values were chosen instead of means because means tend to be heavily influenced by extreme outliers. Additionally, the Census Bureau often masks extreme parcel values in public-use SOC data sets, making it difficult to accurately calculate means, but medians are not affected by these procedures. This analysis is limited to single-family homes built speculatively by construction year and reported sales price. For custom homes built on owner-occupied land with the owner or builder as general contractor, the corresponding land value is not reported in the SOC. Therefore, custom homes are excluded from this analysis.
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