Dive Brief:
- The National Association of Home Builders reported Monday that the 2015 median per-square-foot price for single-family homes in the U.S. ranged from $78 for spec homes (East South Central) to $168 for those contractor-built (Pacific), an increase of 4% and 8% respectively from 2014.
- The per-square-foot price of homes built in the Pacific are 60% higher than the U.S. national average of $105 per square foot.
- The NAHB said the per-square-foot differences from division to division do not include the cost of lot development but do reflect the difference in regulatory costs. The differences could also reflect a change in costs or in the percentage of the type of home (contractor-built vs spec) being built.
Dive Insight:
At a median sales price of $149 per square foot, New England had the second-most expensive homes but the most expensive spec houses ($144). The South's three regions played host to the lowest square-foot prices, ranging from $78 to $100 for both spec and contractor-built homes. According to the NAHB, custom contractor-built homes are more expensive per square foot than spec homes, except for those built in the Middle Atlantic and Mountain regions, where spec homes were more expensive.
Last month, the NAHB reported that the median size of new U.S. homes in the second quarter of the year was down almost 3% from the first quarter — 2,465 square feet to 2,392 square feet. However, the association also found that on a one-year moving average, median size actually increased 16%, typical for economies emerging from recessions as builders cater to those higher-end customers who are the most likely to emerge from an economic downturn unscathed. But the most recent quarter-to-quarter numbers could indicate that the typical post-recession increase in home size is giving way to increased production of smaller, entry-level homes.
In July, the NAHB also reported that 2015 median single-family-home lot size had also decreased to a record low of less than 8,600 square feet, with significant differences between regions. New England's median lot size was more than a half an acre, while half of the lots in the Pacific region were less than 0.15 acres. This reflects what the NAHB reported in May — that 39% of builders in the West are having the most difficult time finding suitable, available lots. Nationwide, 64% of builders surveyed as part of the NAHB/Wells Fargo Housing Market Index said that lot supplies were low or very low, the most since the association began tracking that figure in 1997.