Construction Costs of a New US Single-Family Home Increased in 2024

On Thursday, the National Association of Home Builders (NAHB) released its latest Cost of Construction Survey (CCS), revealing that construction costs now make up 64.4% of the average home price. This marks an increase from 2022, when the share was 60.8%, 3.6 percentage points lower.

The latest finding marks a record high for construction costs since the inception of the series in 1998 and the fifth instance where construction costs represented over 60% of the total sales price, NAHB said.

The finished lot was the second largest cost of the sales price at 13.7%, down more than four percentage points from 17.8% in 2022. The share of finished lot to the total sales price has fallen consecutively in the last three surveys, reaching a series low in 2024.

In 2024, the average builder profit margin rose to 11.0%, up slightly from 10.1% in 2022. Overhead and general expenses increased to 5.7% last year, compared to 5.1% in 2022. The remaining components of the average home-sale price included sales commission (2.8%), financing costs (1.5%), and marketing costs (0.8%). While marketing costs remained steady, sales commission and financing costs declined compared to their 2022 levels.

NAHB breaks down the construction costs of the eight major stages of building as follows:

• Interior finishes, at 24.1%, accounted for the largest share of costs.
• Major system rough-ins account for 19.2% of costs.
• Framing accounts for 16.6% of costs.
• Exterior finishes are at 13.4% of costs.
• Foundations come in at 10.5% of costs.
• Site work adds 7.6% to costs.
• Final steps account for 6.5% of costs.
• Other costs consume 2.1% of costs.