New home with text A Closer Look at the Costs of Building a New Home

A Closer Look at the Costs of Building a New Home

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New home with text A Closer Look at the Costs of Building a New Home

If you’re in the market for a new home, you may wonder about the factors contributing to the home’s total cost. The National Association of Home Builders (NAHB) recently published a Cost of Construction Survey, which details the various costs of building a new home – a typical new single-family house. 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 accounts 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 south central Oklahoma, Oklahoma City and Norman, contact a BASCO member builder.