Homebuilding in 2019: Smaller home size, higher costs

While the trends for home building in 2020 are still unclear, the National Association of Home Builders Construction Cost Survey and the Census Bureau have provided data for 2019. That gives us a starting point for 2020.

Published earlier this year, the NAHB survey revealed that new homes built in 2019 had smaller home sizes and higher costs.

In the 2019 NAHB Construction Cost Survey the average single-family home size decreased to 2,594 square feet of finished floor space. This was the smallest square footage since 2011. However, the average single-family home sales price increased to $485,128.

The Census Bureau provided similar data but collects that data from a larger number of builders than the NAHB survey. This larger pool of responses represented a more diverse geographic mix and provided slightly different results than the more detailed but smaller NAHB survey.

The Census Bureau data shows that the average square feet of floor area in new single-family houses sold decreased in 2019 to 2,518 sq ft from 2,602 sq ft in 2018. The average sales prices of new single-family houses sold decreased very slightly to $383,900 from $385,000 in 2018.

Other highlights from the Census Bureau:

  • The percentage of new homes with 2-car garages increased slightly to 65% and the percentage with 3-car or larger garages decreased slightly to 19%.
  • Exterior wall material continues to shift from brick and vinyl to stucco and fiber cement.
  • The decrease in the average square footage of new homes has resulted in fewer 4-bedroom homes and more 3 bedrooms and 2 bedrooms homes being build.

NAHB’s survey provides a breakdown of the costs for the major stages of construction: finished lot cost, total construction cost, financing cost, overhead and general expenses, marketing cost, sales commission and profit. The construction costs are the highest portion of the total cost of a new home. Interior finishes are the largest portion of the construction costs. Framing is the next largest portion.

Are you in the market to buy a home and want to know How much does it cost to build a house? This article describes the process of building and the associated costs. One of the benefits of building new is the ability to choose many or all of the materials for the home. This can also be where higher cost choices increase the cost beyond the budget.

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