The median square foot prices for new for-sale single-family detached homes started during 2022 increased 18%, according to an NAHB analysis of the latest Survey of Construction data. The rate of increase in prices per square foot far outpaced the rate of inflation in 2022, which was 8% for the Consumer Price Index. According to the analysis, costs increased the most in the Pacific and New England regions of the United States.
Half of new for-sale single-family detached homes started in [the Pacific and New England] divisions in 2022 were sold at prices exceeding $214 and $219 per square foot of floor area, respectively, paid on top of the most expensive lot values in the nation. The most economical single-family detached spec homes were started in the South region, where the median sale prices per square foot were at or below the national median.
The East South Central division is home to the least expensive for-sale homes. Half of all for-sale single-family detached homes started here in 2022 registered square foot prices of $132 or lower, paid on top of the most economical lot values in the country. The other two divisions in the South – West South Central and South Atlantic – also registered median prices below the national median of $155 per square foot of floor area. Their corresponding prices are $152 and $150 per square foot, excluding improved lot values.
Because square foot prices in this analysis exclude the cost of developed lot, highly variant land values cannot explain the regional differences in square foot prices. However, overly restrictive zoning practices, more stringent construction codes and higher other regulatory costs undoubtedly contribute to higher per square foot prices. Regional differences in the types of homes, prevalent features and materials used in construction also contribute to price differences. In the South, for example, lower square foot prices partially reflect less frequent regional occurrence of such costly new home features as basements.
