Construction costs accounted for over 60% of the average home sale price in 2022, according to the NAHB’s Cost of Construction Survey. Since the inception of the series in 1998, 2022 marked the fourth time costs represented over 60% of the total price of the home.
The finished lot category was the second largest cost at 17.8% of the sales price, down from 18.5% in 2019. The average builder profit margin was 10.1% in 2022, compared to 9.1% in 2019.
At 5.1% in 2022, overhead and general expenses were also essentially unchanged when compared to 2019 (4.9%). The remainder of the average home sale price consisted of sales commission (3.6%), financing costs (1.9%), and marketing costs (0.7%). These percentages are also similar to their 2019 breakdowns.
Survey respondents broke down construction costs into eight major construction stages. Interior finishes, at 24.0%, accounted for the largest share of construction costs, followed by framing (20.5%), major system rough-ins (17.9%), exterior finishes (11.8%), foundations (11.0%), site work (7.4%), final steps (5.9%), and other costs (1.5%).
The NAHB generated an interactive graphic highlighting the costs and percentage of construction costs for the eight major construction stages and their 36 subcomponents.Read More