The National Association of Home Builders (NAHB) recently shared the results of their Cost of Construction Survey which shows that construction costs accounted for 64.4% of the average price of a new home in 2024 - up 3.6% since 2022.

 

This marks a record high for construction costs since the 1998 start of the survey. With broad inflation hitting globally since 2022, this is largely to blame for the uptick of construction costs.

Further, finished lots were the largest cost at 13.7% of the sales price, ticking down more than four points from 17.8% in 2022 while the average builder profit margin was 11%, up .9% from 2022.

Meanwhile, lumber prices fell .5% on January 24, 2025, yet lumber prices were 9.6% higher year-over-year.