According to NAHB’s analysis of the 2019 Survey of Construction data, the highest median square foot sale and contract prices are registered in the West and Northeast. The most economical custom and for-sale homes are started in the South region, where the median contract and sale prices per square foot are consistently below the national medians. Looking at single-family for-sale homes started in 2019, the median prices per square foot, excluding improved lot values, range from $165 in Pacific to $94 in the East South Central division. For contractor-built homes, median square foot prices range from $158 in New England to $99 in South Atlantic.

Contract prices of custom, or contractor-built, homes do not include value of improved lot as these homes are built on owner’s land (with either the owner or a contractor acting as a general contractor). Consequently, contract prices are typically lower than sale prices of spec homes. To make comparison more meaningful, the cost of lot development is excluded from sale prices in this analysis.

In the for-sale market, the Pacific and New England divisions register the highest median square foot prices, $165 and $158, paid on top of the most expensive lot values in the nation.

The East South Central division is home to the least expensive for-sale homes. Half of all for-sale single-family homes started here in 2019 registered square foot prices of $94 or lower, paid on top of the most economical lot values in the country. The other two divisions in the South – West South Central and South Atlantic – also registered median square foot sale prices below the national median of $108. Their corresponding prices are $97 and $106 per square foot, excluding improved lot values. Among other factors, lower square foot prices in the South partially reflect less frequent regional occurrence of such costly new home features as basements.

In the custom home market, new contractor-built single-family homes in the New England and Mountain divisions are most expensive to build. Half of custom homes started in New England in 2019 registered prices in excess of $158 per square foot. The median square foot prices in the Mountain division were similarly high at $156 per square foot.

The South Atlantic division is where most economical custom homes were started in 2019 with half of new custom homes registering prices at or below $99 per square foot. The remaining two divisions in the South – East South Central and West South Central – recorded similarly low median square foot contract prices of $106 and $110 – all below the national median of $116.

Since square foot prices in this analysis exclude the cost of developed lot, highly variant land values cannot explain the regional differences in square foot prices. However, overly restrictive zoning practices, more stringent construction codes and higher other regulatory costs undoubtedly contribute to higher per square foot prices.

Typically, contractor-built custom homes are more expensive per square foot than for-sale 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 pricier features and materials. In 2019, the Mountain division registered the largest differences between median contract and sale square foot prices – $156 vs $128. However, the neighboring costly Pacific division has sale square foot prices exceeding contract square foot prices – $165 vs $121.

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. 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. While the reported median prices cannot reflect the price variability within a division, and even less so within a metro area, they, nevertheless, highlight the regional differences in square foot prices.

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.

Tags: contract price per square foot, home building, price per square foot, sale price per square foot, single-family, Square foot price