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Home building costs soar due to government regulations, material price increases

Changes to building codes over the past 10 years have added the most to regulatory costs. Averaged across all homes, the cost increases associated with codes account for 9.9% of a builder’s construction costs, and 6.1% of the final house price.

While NAHB’s previous regulatory estimates in a 2016 study were fairly similar, the price of new homes increased substantially in the interim, the association noted. When applying these percentages to U.S. Census data on new home prices, the data show an estimate that regulatory costs in an average home built for sale went from $84,671 to $93,870 — a 10.9% increase during the five-year span between the 2016 and 2021 estimates.

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