Higher regulatory costs weigh in new home prices

The National Association of Home Builders (NAHB) estimated that regulatory costs have added $93,870 to a new single-family home’s current average sales price, up 23.8% to $397,300.

NAHB attributed $41,330 of the extra $93,870 costs to regulation during development, while $52,540 was due to regulation during construction. It also reported a 10.9% jump in its regulatory costs estimates between 2016 and 2021, up from $84,671 to $93,879 during the five-year period.

“This study illustrates how overregulation is exacerbating the nation’s housing affordability crisis and that policymakers need to take bold steps to reduce or eliminate unnecessary regulations that will help builders increase the production of quality, affordable housing to meet growing market demand,” said NAHB Chairman Chuck Fowke.

The association noted that the cost of regulation does not affect how rising lumber and other material prices have raised housing costs over the past 12 months. In a separate study, NAHB found that lumber prices – which have tripled since April 2020 – have added $35,872 to the price of a typical new home. This is on top of the $93,870 cost due solely to regulation.