For single-family homes started in 2014, median prices, excluding improved lot values, range from $159 per square foot for contractor-built homes in the Pacific and New England divisions to $80 per square foot for speculatively-built homes in the East South Central division.
The most expensive new single-family homes in 2014 were contractor-built homes in the Pacific and New England divisions with the median contract price of $159 per square foot. Just like a year ago, the Middle Atlantic division remains home to the most expensive spec houses with a median sale price of $149 per square foot, excluding improved lot values.
The most economical homes are spec homes started in the South region, where median sale prices per square foot (excluding improved lot values) range from $79 in the West South Central division to $85 in the South Atlantic division, consistently below the national median sale price of $89 per square foot.
Looking at the contractor-built starts in the South, prices per square foot are slightly higher ranging from $85 in the East South Central division to $94 in the West South Central division but still below the national median contract price of $97 per square foot.
Typically, contractor-built custom homes are more expensive per square foot than spec homes after excluding improved lot values, suggesting that new custom home buyers are not only willing to wait longer to move into a new home but also pay extra for more expensive features and materials.
The clear exception is the Middle Atlantic division where half of spec homes have costs per square foot in excess of $149 while the median for contractor-built homes is $120. In 2014, the East North Central and West North Central divisions also registered median sale prices per square foot exceeding median contract prices but the differences are not substantial.
Nationally, square footage prices (excluding improved lot values) for both custom and spec homes increased just slightly, 4 and 2 percent respectively, compared to 2013. However, some regions registered much bigger increases. In the Middle Atlantic division, the median contract price per square foot jumped 17 percent and the median sale price increased 14 percent. In the West North Central division, sale prices per square foot increased 16 percent but contract prices per square foot registered a small decline.
Annual changes in median square footage prices may reflect changes in home building costs (including material, labor, regulatory costs, etc.) but may also signal a shift in a production mix. For example, a shift towards high-end homes will be reflected in rising median square footage prices, all other things being equal. And vice versa, a shift in a home building mix towards starter, first-time home buyer’s homes will manifest itself in lower median prices per square foot.
The NAHB estimates are based on the Survey of Construction (SOC) data. The survey information comes from interviews of builders and owners of the selected new houses. Contract prices of new contractor-built homes do not include value of improved lot and, typically, are lower than sale prices of spec homes.
To make comparison more meaningful the cost of lot development is excluded from sale prices and prices are compared on a per foot basis. The reported prices are medians, meaning that half of all builders reported higher per square foot prices and the other half reported prices lower than the median.
For the square footage statistics, the SOC uses all completely finished floor space, including space in basements and attics with finished walls, floors, and ceilings. This does not include a garage, carport, porch, unfinished attic or utility room, or any unfinished area of the basement.