The median square foot prices for new for-sale single-family detached (SFD) homes increased 19% on a year-over-year basis in 2021, reflecting rising building material prices and labor costs, according to an NAHB analysis of Survey of Construction data. The analysis excludes lot values, which reached record high levels in 2021. The Pacific and New England regions registered the highest median prices, $206 and $198 per square foot, respectively.
The most economical SFD spec homes were started in the South region, where the median sale prices per square foot were below the national medians. The East South Central division is home to the least expensive for-sale homes. Half of all for-sale SFD homes started here in 2021 registered square foot prices of $111 or lower, paid on top of the most economical lot values in the country.
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.
In the custom home market, new contractor-built SFD homes in the New England are by far most expensive to build. Half of custom SFD homes started in New England in 2021 registered prices in excess of $200 per square foot of floor area. The median custom square foot prices in the neighboring Mid Atlantic division were $154 per square foot – third highest in the nation. The Mountain division came in second with the median of $160 per square foot of floor space.
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