New York Construction Report staff writer
The National Association of Home Builders (NAHB) latest Cost of Construction Survey shows that 60.8 per cent of the average home sales price in the U.S consisted of construction costs in 2022.
Since the first survey in 1998, this is just the fourth time construction costs represent over 60 per cent of the total price of the home —61.7 per cent in 2013 and 61.8 per cent in 2015.
The finished lot cost was the second largest cost at 17.8 per cent of the sales price, down from 18.5 per cent in 2019.
At 5.1 per cent in 2022, overhead and general expenses were also essentially unchanged when compared to 2019 when it was 4.9 per cent.
Survey respondents broke down construction costs into eight major construction stages:
- interior finishes – 24.0 per cent, accounted for the largest share of construction costs, followed framing – 20.5 per cent
- major system rough-ins – 17.9 per cent
- exterior finishes – 11.8 per cent
- foundations – 11 per cent
- site work – 7.4 per cent
- final steps – 5.9 per cent
- other costs – 1.5 per cent
Total construction costs accounted for $392,241 of the average home sales price of $644,750. Statistics represent national averages and the survey sample was not large enough for a geographical breakdown.
However, according to NAHB researchers, the construction cost percentages in the survey serve as a useful yardstick as these component shares are relatively comparable for other average home prices. For example, the sales price of a $450,000 home would likely factor in construction costs of around $270,000, or 60 per cent.
NAHB economist Eric Lynch provides more analysis in this Eye on Housing blog post and the infographic below includes more details on the construction cost breakdown.
NAHB is a Washington-based trade association representing more than 140,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. The organization is affiliated with more than 700 state and local home builders associations around the U.S.