"In the past, (builders) had really been the ones that had been feeding the market and selling lots to investors," said Tom Dallape, a principal at The Hoffman Co., a land brokerage firm based in Irvine, Calif. "Now all of a sudden they are rushing back in."

Major players such as Ryland Group Inc. and Meritage Homes Corp., are among those that jumped into the fray.

Meritage recently signed contracts to buy 2,500 lots spread out over new communities in several states, including California. The builder plans to open nine new communities this year or early next.

This summer, Ryland bought land or signed option contracts to do so in several markets, including Indianapolis, Atlanta, Houston, Las Vegas and Baltimore.

"We are pursuing more deals than at any time in the past several years," said CEO Larry Nicholson. 

Builders are primarily looking for land in areas that are already cleared for home construction. That way, they will be ready to build and sell in just a few months.

In May, Trumark Homes bought 39 lots in Upland, Calif., where it plans to build homes early next year.

The Irvine-based company bought the land — which already had paved streets and utility connections ready for construction — for less money than the previous developer owed the bank.

The previous owner planned to build and sell homes in the $500,000-range. Trumark's homes will be priced $200,000 less.

"We were able to get the land for free and the improvements they made we got at like 45 cents on the dollar," said Michael Maples, Trumark's chief executive. "The market changed."