Story By Nathan Drew, Broker/Owner of Drew Realty | May 2026
I’ve been thinking a lot about competition recently. Soccer season has started for #TheDrewGirls. I’m coaching two teams! We won both games last weekend. I also have “triathlon season” coming up. The race that I have circled on my calendar this year is the Rockford, Illinois Half Ironman (70.3 miles). I spent the winter increasing my VO2 Max, becoming more efficient in my swim stroke, and increasing my cadence on the bike and run. To make things more interesting, my dad will be joining me in Rockford and participating in his first Ironman event, at the ripe age of 64! No matter your age, one needs to continue to put oneself into uncomfortable situations. Your body knows if you’re living or dying!
On the real estate front, in 2026, the Des Moines metro will officially have two national, heavyweight builders competing against each other. Excuse me… THE two heavyweights. That’s D.R. Horton, America’s largest builder, and Lennar Corp., America’s second largest builder. That’s in addition to some great local builders, continuing to build the metro. It’s going to be interesting to watch. Remember that competition is generally a very good thing for the consumer.
Let’s take a look at some of the numbers from the First Quarter of 2026, when compared to previous years… First Quarter of 2026, lot sale numbers are up when compared to First Quarter of 2025!
Nearly 27%! I’m hopeful that this is because builders are feeling confident in the spring selling season coming up, but more realistically, it’s likely attributed to the fact that lot sales in the First Quarter of 2025 were still down because builders were still building on lots that they had already closed on during the building “boom” post-COVID. I would mention that it is a good sign that builders have built through much of their lot inventory that they have had on their books since that time.
Next, contrary to lot sales, First Quarter of 2026 building permits (single family and townhome) were slightly down. About a 9% drop. For those that have read my article in the past, I’m sure I sound like a broken record. Builders are pulling back slightly on new construction permits, likely due to a combination of slower absorption pace and tighter margins, particularly as incentives and financing costs continue to pressure profitability.
The next graph shows First Quarter of 2026 new construction sales. 2026 sales were very close to the first quarters of 2023 and 2025, but a far cry from the post-COVID years. I’ll keep it short and say that this is likely due to consumers still having the feeling that prices and interest rates are “high”, so they’re slow to buy.
The final graph shows the metro’s existing supply of finished lots. There are currently 7,992 lots that are ready to be built on for single-family and townhomes. That’s a percentage increase of about 6% from a year ago.
I like to bring this point up during the first quarter of each year. As a reminder, a “healthy” lot market has about a 30-month supply of finished lots at any given time. Last year I noted that the previous five-year-annual-average of townhome and single-family new construction permits for the metro is 3,815 permits/year (averaged out to 318 permits/month). Regardless of the fact that the metro’s existing lot inventory has increased another 6% year-over-year, at 7,992 finished lots, the lot market is still running 16% below where the 30-month supply of finished lots “should be”. A year ago, the lot market was 21% below that 30-month supply threshold.
I said it once and I’ll say it again, watching the builders compete in 2026 is going to be interesting. I’m sure that the variety of housing types brought by the nationals will be appreciated by local homebuyers. The nationals have been able to test “what sells” in many markets across the country. Moving forward in 2026, from a lot and land standpoint, I’m confident that the nationals will continue to purchase lots from third party land developers and take advantage of “just-in-time land inventory”. I’m also confident that local builders will continue to develop many of their own subdivisions, so they can keep lots in front of themselves and not risk all of the lots being gobbled-up by the nationals.
2026… I’m going to call it the year of competition! I can say this, I know it’s going to be a lot of fun competing in the Rockford 70.3. My dad and I pushing ourselves to our limits with 2,000 other triathletes, facing the elements head-on, and staying “uncomfortable”. One could even compare it to two heavyweights like D.R. Horton and Lennar, duking it out, over the almighty Des Moines metro homebuyer! Maybe there are some parallels there… or maybe not. Either way, 2026 is shaping up to be a competitive year—on the race course and in the metro’s housing market.
Nathan Drew, Broker/Owner of Drew Realty, a lot and development ground brokerage, has been in the business of lot and land acquisition and disposition since 2008. He keeps an ongoing inventory of all vacant lots and land throughout the Des Moines Metropolitan Area, and puts together a quarterly email blast with an interpretation of the metro’s lot market. Email Nathan to join his email blast list at Nathan@DrewRealtyUSA.com and follow him on Twitter @DrewRealtyUSA, on Facebook @DrewRealty, and on Instagram DrewRealty.