One of the biggest factor in the rising costs of new homes is the cost of land. And, according to NAHB's Natalia Siniavskaia for Eye on Housing that trend doesn't appear to be changing anytime soon.
Single-family lot prices set a new record in 2015, with half of the lots priced at or above $45,000. According to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC) data, this is the highest median lot value on record and exceeds the previous record of $43,000 reached in 2006, in the midst of the housing boom when twice as many single-family homes were started.
Simple supply and demand is just one factor.
However, the rising lot values are consistent with record lot shortages that NAHB reported in May of this year. They are also consistent with significant and rising regulatory costs that ultimately increase development costs and boost lot values.