For only the fourth time in more than 20 years, construction costs, rising with inflationary pressures, represent more than 60 percent of the total price of the average newly built home, the National Association of Home Builders reported.

According to the NAHB’s latest “Cost of Construction Survey,” 60.8 percent of the average home sales price consisted of construction costs in 2022, similar to the 61.1 percent breakdown posted in 2019. The only other times construction costs represented more than 60 percent was in 2013 (61.7 percent) and 2015 (61.8 percent), the Washington, DC-based NAHB said.

The finished lot cost was the second largest cost at 17.8 percent of the sales price, down from 18.5 percent in 2019. At 5.1 percent in 2022, overhead and general expenses were also essentially unchanged when compared to 2019 (4.9 percent). The remainder of the average home sale price consisted of sales commission (3.6 percent), financing costs (1.9 percent), and marketing costs (0.7 percent), according to the NAHB.

Survey respondents broke down construction costs into eight major construction stages. Interior finishes, at 24.0 percent, accounted for the largest share of construction costs, followed by framing (20.5 percent), major system rough-ins (17.9 percent), exterior finishes (11.8 percent), foundations (11.0 percent), site work (7.4 percent), final steps (5.9 percent), and other costs (1.5 percent).

These total construction costs accounted for $392,241 of the average home sales price of $644,750, the NAHB noted.

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