How Construction Costs, Lot Prices Impacted Sales in 2017

Filed in Economics, Home Building by on December 11, 2017 1 Comment

According to a recent NAHB survey of home builders, construction costs account for 55.6% of the final sales price of the average new home, and 21.5% of the total sales price is attributed to the cost of the lot.

Rising materials prices and limited labor have been primary concerns for builders throughout 2017, and those issues are expected to continue into next year as well.

However, as NAHB Chief Economist Robert Dietz noted recently in Eye on Housing, recent figures for starts and sales are indicating continued growth is ahead.

“Single-family starts (877,000) are at a post-recession high, and sales of new single-family homes sales rose 6% [in October], recording its strongest reading in a decade,” Dietz said. “Moreover, a rising share of new home sales is coming from homes that have not yet begun construction, pointing to additional gains for construction in the near term.”

For more details about the survey and a breakdown of the average sales price, go to housingeconomics.com.

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