Lack of demand for home lots

With the housing market still trying to get back on its collective feet, consultants say that there's very little demand for home building lots across most of the country.

Industry analyst John Burns told Origination News that the country's home builders aren't currently looking to purchase Houston property for home lots, even though their current inventories are far below normal levels.

He said that during the housing boom, large homebuilders controlled or owned more than 2 million lots. But now, that number has fallen to less than 1 million, as builders try to reduce their exposure as sales slowed. Even with the reduction of inventory, the slow market has increased their monthly supplies.

"Public builder sales have shrunk so much that the years supply of owned lots has actually risen from two years to five," Burns told the source.

While the supply of available new homes is still 8.20 months, the overall inventory is approaching record lows because of slow sales. Data from the Commerce Department last month showed that the number of new homes for sale slipped below 200,000 in November, the first time it's been that low in more than 40 years.