A Closer Look at the Costs of Building a New Home
If you’re in the market for a new home, you may be wondering about the factors that contribute to the total cost of the home. The National Association of Home Builders 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 costs have remained consistent in recent years.
According to the 2015 survey, the biggest single component of a home’s price is construction costs, which accounts for 62 percent of the cost. The cost of the finished lot is the second largest factor at 18.2 percent.
Survey respondents broke down construction costs into eight major construction stages: • Interior finishes: 30 percent • Framing: 18 percent • Exterior finishes: 15 percent • Major system rough-ins: 13 percent • Foundations: 11.6 percent • Final steps: 6.8 percent • Site work: 5.6 percent • Other costs: 0.5 percent
The survey reaffirms the steady progress of our economy since the Great Recession, as home values have gradually risen. And, in each year since 2009, the size of single-family homes has grown as well. The average home in 2015 had 2,802 square feet of finished space, compared to 2,402 in 2009.
The size of the lot has increased significantly, too, jumping to 20,129 square feet (nearly half an acre) in 2015, from 14,359 square feet just two years ago. Though building practices and the cost of labor, land and materials can vary widely across the country, these national averages provide an encouraging snapshot of the building industry and our nation’s housing recovery. The upward trend of home buyer confidence and home price appreciation is inspiring more and more consumers to build the home of their dreams.