Regulatory Costs Drive Up Single-Family Home Prices

Regulations imposed on builders have driven home prices up considerably over the last several years. A recent survey from the National Association of Home Builders shows that, on average, regulations imposed by governments at all levels account for $131,734, or 26.4% of the final price of a new single-family home for sale.

How do regulatory fees break down?

Of the $131,734, $46,795 is attributed to regulations imposed during the lot’s development. The remaining $84,939 is due to regulatory costs imposed on the builder during construction, after the builder purchases the finished lot.

Average regulation costs have grown in recent years

The survey shows that the cost of regulation has climbed by 40% since 2021. At that time, regulation costs accounted for approximately $93,871 of the total cost of a single-family home, and it is more than double NAHB’s estimate of $65,224 in 2011.