The cost breakdown of constructing a single-family home, as told by one pie chart

To better understand single-family construction costs, ResiClub reached out to the National Association of Home Builders (NAHB) for the trade group’s latest cost breakdown.

The NAHB provided ResiClub with the national averages for itemized costs in each stage of construction for a new single-family home in 2022. The data comes from NAHB’s construction cost survey published last year.

Among the builders surveyed, the average sales price of their single-family homes in 2022 was $644,750 and includes costs for construction, the finished lot, financing, overhead and general expenses, marketing, sales commission, and profit. Total construction costs for the “average” single-family home included in the survey was $392,241.

The pie chart below breaks out those costs for the “average” home.

The NAHB broke down the costs of the eight major stages of construction (see the 8 color groups in the pie chart above), which are made up of 36 total subcategories (see the table below).

Of the 36 subcategories, framing, including the home’s roof, accounts for the biggest chunk at 15.5% of the total construction costs. It’s followed by “excavation, foundation, concrete, retaining walls, and backfill” at 10.1%

On Friday, the U.S. Supreme Court in a 9-0 decision ruled that homebuilders and developers may challenge California’s development “impact fees.” The case will now go back to the California courts.

The so-called “impact fees” in California have long been among the highest in the nation.

“A home permit can contain 20-30+ lines of impact fees not including those paid by the land developer or fees and costs moved into bond districts. In California, permits and impact fees often exceed $100,000 per home,” Jeff Grenz, a custom homebuilder in Sacramento, tells ResiClub.

On Thursday, Inman published an article with this headline: “Single-family home sales to investors hit all-time high.” The story pulled from the Q4 investor report published this week by CoreLogic.

While the headline is correct in stating that investor purchases, primarily by small players owning 1 to 10 rentals, as a percentage of home sales have slightly increased, it’s worth noting that total investor home purchases, along with overall existing home sales, have sharply declined since mortgage rates spiked. Non-investor purchases just declined slightly more.

In other words, investors were a slightly larger portion of a pie that also decreased in size.