Research: House Size, Client Budgets, & Cost Increased in 2014

The majority of builders and designers reported that their cost for materials and labor increased compared with the past three years, and a tighter labor market is among the causes. A California builder remarked that trades and suppliers raised prices to levels higher than those that existed during the construction boom before the recession. Survey participants from central Texas, Ohio, and North Carolina frequently mentioned that the labor shortage in their markets was acute, while an Arizona builder noted that the labor situation in his market has been steady.

Many others attributed increased costs to buyers requesting higher-grade finishes and taking a more active role in specifying products for their homes. Builders that carry land cited higher lot costs. Rising permit fees and code changes also were mentioned as factors. More statistics regarding house size, cost, and buyer profiles are available in the charts that follow.

Methodology & Respondent Information

This survey was distributed between Jan. 5 and Jan. 15, 2015, to a random sample of Professional Builder’s print and digital readers. No incentive was offered. By closing date, a total of 176 eligible readers completed the survey. Respondent breakdown by discipline: 33.1 percent custom home builder; 21.1 percent diversified builder/ remodeler; 15.4 percent production builder for move-up/movedown buyers; 14.3 percent architect/designer engaged in home building; 4 percent luxury production builder; 1.7 percent multifamily; 1.7 percent manufactured, modular, log home, or systems builder; 4 percent production builder for first-time buyers; and 4.6 percent other. Approximately 48.3 percent of respondents sold one to five homes in 2014, and 18.6 percent sold more than 50 homes.