A Closer Look at the Costs of Building a New Home

Submitted by Tim King, President

North Coast Building Industry Association (NCBIA) www.ncbia.com

If you’re in the market for a new home, you may wonder about the factors
contributing to the homes total cost. The National Association of Home Builders
(NAHB) recently published a Cost of Construction Survey, which details the
various costs of building a typical new single-family home. Many of the results
show that the percentage contribution of each component has remained
relatively consistent in recent years.
According to the 2022 survey of home builders, the biggest single component of
a new home’s total sales price is construction costs, which account for around
60%. For example, the sales price of a $450,000 house would likely factor in
construction costs of approximately $270,000, or 60%.
Survey respondents broke down construction costs into eight major construction
stages:
 Interior finishes (e.g., cabinets, drywall, flooring): 24.0%
 Framing: 20.5%
 Major system rough ins (e.g. electrical, HVAC, plumbing): 17.9%
 Exterior finishes (e.g., roofing, windows): 11.8%
 Foundations: 11.0%
 Site work (e.g., architecture, building/permit/impact fees) : 7.4%
 Final steps (e.g., driveway, landscaping): 5.9%
 Other costs: 1.5%
The survey reveals that in 2022, 60.8% of the average home sales price
consisted of construction costs, similar to the 61.1% breakdown posted in 2019.
Since the start of this survey in 1998, this is just the fourth time construction
costs represent over 60% of the total price of the home — it was 61.7% in 2013
and 61.8% in 2015.
The average single-family home size in the survey was 2,561 sq. ft. of finished
floor space, the smallest square footage since 2011. The average size of new
homes completed for sale peaked in 2015 at 2,802 sq. ft. but has declined in
surveys since.

Though building practices and the cost of labor, land and materials can vary
widely across the country, these national averages provide an overall snapshot
for the building industry.
To learn more about the home building process in contact the NCBIA or visit
nahb.org. We are your local not-for profit trade association representing
reputable and dependable member companies involved in all aspects of home
building, remodeling, and other aspects of residential and light commercial
construction.
Visit our website – ncbia.com for a list of our members, as well as our new For
Consumer section and job posting (under the About Us tab) and be sure to visit
our Virtual Parade of Homes. Or give us a call Monday through Friday from 9:00
a.m. to 5:00 p.m. at 440-934-1090.
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Homeownership is truly a cornerstone of the American way of life. North Coast
Building Industry – Come Build with Us!