Homebuilders across the U.S. are increasingly turning to “land banking,” a strategy where they purchase and hold large plots of undeveloped land to secure future development opportunities. This approach allows builders to better anticipate market shifts and avoid the rising costs of last-minute land acquisition, especially as housing demand remains strong. With a limited supply of available land and growing regulatory challenges, land banking has become a valuable tool for controlling costs and ensuring long-term project pipelines.
While this practice helps builders navigate economic uncertainties and maintain a competitive edge, it can also contribute to rising home prices. By controlling land supply and delaying construction until conditions are favorable, some argue that builders may inadvertently restrict new housing availability, further exacerbating affordability issues. As the housing market looks ahead to 2025, land banking will likely continue to shape how and when new homes are brought to market.
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