Home prices are rising, and that's partially due to the increase in costs for building a home. According to the National Association of Home Builders’ Eye On Housing blog, reporting on findings from the association's most recent Cost of Construction Survey, construction costs accounted for 64.4% of the average price of a home in 2024. The share was 3.6 points lower, at 60.8%, in 2022. At the same time, the average builder profit margin was 11% in 2024, up less than a percentage point from 10.1% in 2022.
At 5.7% in 2024, overhead and general expenses rose when compared to 2022 (5.1%). The remainder of the average home sale price consisted of sales commission (2.8%), financing costs (1.5%), and marketing costs (0.8%). Marketing costs were essentially unchanged while sales commission and financing costs decreased compared to their 2022 breakdowns.
Construction costs were broken down into eight major stages of construction. Interior finishes, at 24.1%, accounted for the largest share of construction costs, followed by major system rough-ins (19.2%), framing (16.6%), exterior finishes (13.4%), foundations (10.5%), site work (7.6%), final steps (6.5%), and other costs (2.1%). Read ther full report
