New Home Construction Statistics
The promise and potential of new home construction can inspire you to make a fresh start in a new location. Affording a new home often represents a milestone, but challenging economic and housing market conditions can delay new builds.
We analyzed data from the U.S. Census Bureau and the National Association of Home Builders (NAHB) to better understand new home construction. Our research also highlights the difference between buying and building to help guide your housing purchase decision.
If you want to build in 2024, moving to areas with lower building costs may help you save on costs in the long run. So, before you start researching top-rated moving companies, read on to learn more about the new home construction market by state and how much it costs to build one.
Key Findings
- 1,022,000 new builds were started in March 2024, a 21.2% increase year over year.
- In January 2024, Nevada, Arizona, Vermont, Montana, and West Virginia had the highest percentage change in building permits filed from January 2023.
- Washington, D.C., Alaska, North Dakota, Kansas, and Nebraska had the lowest percentage change.
- The total cost of a new home construction ranges from $136,000 to $523,400.
- The Midwest has the cheapest average home cost at $427,700 compared to the Northeast average at $945,700.
- Read more: New Construction Home Warranty Guide
New Residential Construction Statistics 2024
According to April 2024 data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD), authorized single-unit housing in March 2024 in the Northeast, Midwest, South, and West fell from February’s rates but has increased from March 2023.
Construction began on 1,022,000 single-family homes in March 2024, 12.4% below the figures from February 2024 but 21.2% higher than housing starts in March 2023. The completion of 947,000 single-family homes in March 2024 is 10.5% less than February 2024’s completion rates and 8.5% lower than March 2023.
A census report released in May 2023 reports 683,000 new houses were sold in March 2023, a 9.6% increase from February 2023 but a 3.4% decline from one year prior. The majority of the new houses sold were located in the South, at 386,000 homes. There were 432,000 new homes for sale in March 2023, a 7.6-month supply at the May 2023 sales rate. The average sales price was $562,400, but most homes sold were listed for $300,000 or more, with 29% of listed homes falling in the $300,000 to $399,999 price range.
New Home Builds by State
U.S. Census Bureau data as of January 2024 shows single-family building permits increased by 43% from January 2023 to January 2024, totaling 75,906 permits nationwide in the first month of this year. Some of the most populated states, including Texas, California, and Florida, experienced the highest building permit filings in January 2024. North Dakota, Washington, D.C., Alaska, Wyoming, and Vermont comprise the states with the fewest number of building permits.
Building permit filings increased across the Northeast, Midwest, South, and West, with the West claiming the highest increase at 67% from a year prior. Among single-family units, the difference in the number of building permits filed from January 2023 to January 2024 was highest in Nevada, Arizona, Vermont, Montana, and West Virginia and lowest in Washington, D.C., Alaska, North Dakota, Kansas, and Nebraska.
Within major metropolitan areas in the West, new building permits increased 82% in the Mountain region. Southern permits increased 600% in the Cumberland, Maryland-West Virginia, region. In the Midwest, Kokomo, Indiana, experienced the highest increase in building permits in the nation at 900%. The number of new building permits increased by 21% in the Northeast, specifically the Mid-Atlantic, with the most significant increase (400%) in the Bloomsburg-Berwick, Pennsylvania, area.
How Much Does It Cost To Build a House?
According to HomeLight, several factors influence the cost of a new construction home, from your desired location, square footage, and materials to the choice between a custom and a production home.
The cost of building a home averaged $313,000 in 2023, not including the cost of the land. This is $200,000 lower than the average sales price of new construction homes in the first quarter of 2024. Costs per square foot average around $150. So far in 2024, home sales prices average $427,700 in the Midwest, $448,600 in the South, $608,100 in the West, and $945,700 in the Northeast, according to the U.S. Census Bureau.
All cost data in this section sourced from HomeAdvisor unless otherwise noted.
Common new construction expenses include the following:
- Architect: $6,606
- Appliances: $10,875
- Interior and exterior finishes: $90,000–$160,000
- Foundation: $9,415
- Framing: $20,000–$50,000
- Key systems (HVAC, electrical, plumbing): $29,000–$58,000
- Land and lot preparation: $4,300–155,100
- Permits: $1,200–$2,000
- Roof: $5,700–$12,000
Add-ons such as a pool, landscaping, a deck, or solar panels can quickly increase prices. However, the Producer Price Index report shows the growth in the average cost of building materials decreased from 15% in 2022 to 1.3% in 2023. Prices on gypsum, softwood lumber, and ready-mix concrete fell at the end of 2023, and pricing on steel mill products saw its first increase since May 2023.
Cost of Lumber
The NAHB sources weekly information from the Random Lengths Framing Lumber Composite. In the third week of April 2024, lumber composite prices fell 3.9% from the previous week, continuing a diminishing trend for the past month. The price of lumber futures decreased by 5.9%. Falling lumber prices may signal a cooling market, but it’s unlikely you’ll see relief at the checkout stand until they stabilize.
Cost of Design Work
Besides materials, labor represents one of the largest new home construction expenses. Delegating the design work to an architect costs an average of $6,606, or roughly 5% to 20% of your home’s total cost. Hiring a draftsperson instead could save you more than half the cost of an architect. Building a 20% emergency cost buffer can provide a safety net for additional expenses.
Cost To Build a House
The total cost to build a new home ranges from $136,000 to $523,400. Purchasing the land and preparing the lot for a tidy sum of $4,300 puts you at the lower end of the cost spectrum. Splurging on fixtures, finishing touches, key home systems, and framing will dramatically increase your final costs.
Types of New Construction
New homes take shape via innovative building materials, modern configurations, and cost-effective fabrication techniques. According to the NAHB, the types of new construction available to potential homebuyers include:
- 55-and-up: Homeowners nearing retirement often seek housing that promotes a socially engaged and active lifestyle with age-specific design cues such as single-level residences or wheelchair-accessible ramps.
- Concrete construction: Concrete-built homes can reduce energy costs by more than 30% and resist common pests and mold.
- Custom: Custom homes typically cost between $200 and $500 per square foot, but buyers can incorporate tailored design elements, technological innovations, and sustainability.
- Log: Raising a log home requires milled or handcrafted logs you can purchase as a kit. In addition to reducing build time, log homes can be up to 15% more energy efficient than a traditional stick-frame home when sealed properly.
- Modular: Built offsite and delivered for permanent placement, modular homes remove common fabricating overhead costs while maintaining a degree of customization.
- Multifamily: The umbrella of multifamily housing includes apartments, condominiums, student housing, 55+, low-income, and mixed-use. Community engagement lies at the core of these types of housing.
- Panel construction: In contrast to modular homes, panel construction homes arrive at their final destination in panels or frames. Local contractors typically finish fabrication on-site.
- Production: Communities of production homes share similar design elements, exterior colors, and interior amenities. Landowners often perform extensive market research to appeal to buyers before breaking ground.
- Timber frame: Mortise and tenon joints secure timber frame homes, which use up to 30% less wood than conventional housing. Most timber frame houses can withstand high winds, fire, and earthquakes.
Each new construction home type caters to multiple budgets, design preferences, and community structures.
Should You Build a Home in 2024?
The National Association of Realtors’ Realtor Magazine reports that new home construction will increase in 2024. Historically, new home sales comprise between 10% and 12% of all market sales, but that share has nearly tripled recently. Townhome market shares reached a 17-year high in the fourth quarter of 2023, according to the NAHB, representing a 2.1 percentage point increase over 2008’s first-quarter peak of 14.6%.
Continued growth requires builders to up the ante by providing financial assistance with closing costs or buying down mortgage rates for select buyers. Additional challenges limiting new home sales include steep inflation, soaring interest rates, and continued supply chain snags. Until economic conditions improve, many cautious homebuyers continue to put off purchasing a new construction home or an existing resale.
FAQ About New Home Construction
How can you estimate new home construction costs?
You can estimate new home construction costs by calculating an average of $150 per square foot. Custom new construction homes can cost between $200 and $500 per square foot.
When is the down payment due for a new construction home?
The down payment for a new construction home is typically due at closing.
How long does it take to build a home?
On average, it takes a minimum of 12 months to build a home. However, delays due to permits, weather, or a supply shortage can quickly increase this time frame.
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