The cost breakdown for constructing a single-family home in 2024

The National Association of Home Builders (NAHB) just published its latest national averages for itemized costs in each stage of construction for a new single-family home.

In 2022, the average sales price of new single-family homes sampled by NAHB 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” new single-family home included in the survey was $392,241.

In 2024, the average sales price of new single-family homes sampled by NAHB was $665,298 and total construction costs for the “average” new single-family home included in the survey was $428,215.

Among new builds included in the survey, that’s a +3.2% jump for average sales price and a +9.2% jump for total construction costs.

Since mortgage rates spiked in late spring 2022, lower housing demand—along with builders in many markets offering more incentives and affordability adjustments to attract buyers—has squeezed margins off the historic highs achieved during the Pandemic Housing Boom. For some homebuilders, rising input and construction costs have further compressed margins over the past two years.

Note: Each category below includes “all the costs paid by a builder that go into a particular item, including labor costs paid directly by the general contractor, the cost of hiring subcontractors, and the cost of materials, however they are purchased.”

Homebuilders have seen one major area of relief: Framing.

During the Pandemic Housing Boom, a surge in housing demand and remodeling demand collided with supply chain disruptions, sending lumber prices to historic highs. Sawmills, which had cut production early in the pandemic expecting a slowdown, struggled to keep up as demand soared, causing lumber prices to skyrocket.

Lumber prices came back down as supply chains improved and demand for remodeling softened, thus lowering costs for framing.

Indeed, the price per thousand board feet of lumber, currently at $551, is -61.2% below its peak of $1,419 in May 2021. Some lumber futures contracts at the time in spring 2021 were trading for over $1,700 per thousand board feet.

Go here to read the full NAHB report.

U.S. home prices, as measured by Case-Shiller National Home Price Index, fell -0.1% between the October 2024 reading and the November 2024 reading.

Year-over-year: +3.8% 

Since the 2022 peak: +5.1% 

Since March 2020: +50.5%

We're at the tail end of the reporting window for the seasonally soft window, and we’ll soon enter into the seasonally stronger window (some data series faster than others). The real world housing market will make this transition before the data.

Keep in mind, the data above is a proxy for nationally aggregated existing single-family home prices. Regionally, and by product type, this will all vary.