The average cost to build a house rose from 2020 to 2021 due in part to the rising costs of several individual housing components. In CoConstruct’s construction project management system, home builders create estimates for their projects using cost codes, formulas, and dimension data to provide accurate price estimates to their clients. This same information is then pulled into a home builder’s budget for business owners to track their budgeted costs in real time as the project progresses. After analyzing the budgeted costs of seven cost categories on over 14,000 home building projects completed in CoConstruct between 2020 and 2021, we’ve identified the following two-year trends.
Insulation, roofing, drywall, appliances, and landscaping costs rise
The average roofing, insulation, drywall, appliances, and landscaping costs for new homes in the US rose over the past two years. While there have been quarterly fluctuations in costs, the overall trends are clear: By the end of 2021 the average cost to build a house was more expensive than it was at the start of 2020.
CoConstruct home builders budgeted at least 33% more for roofing, insulation, and appliance costs in Q4 2021 than they did in Q1 2020. Drywall and landscaping costs stood out from the pack with slightly lower and much higher two-year cost differences, respectively. With a 27%, or $3,483, increase from Q1 2020 to Q4 2021, the average budgeted cost to drywall a house had the lowest price increase of any of the cost categories in this analysis. Average landscaping costs, on the other hand, rose the most over a two-year period with a 64%, or $5,512, increase. This suggests that drywall costs are less affected than roofing, insulation, and appliance costs by the overall market trends that increased average cost to build a house over the last two years. Notably, the increased demand for outdoor space in response to the COVID-19 pandemic has likely impacted the surge in landscaping costs, as seen by the costs peaking for projects ended in 2020 when more lockdown orders were in effect.
Roofing and insulation costs are currently higher in Q4 2021 than they’ve been at any point in time over the last two years. However, this is not the case with drywall, appliances, and landscaping costs. The average budgeted cost to drywall a home peaked in Q4 2020 at $16,667 per home before dipping and rebounding throughout 2021. Meanwhile the highest budgeted appliances and landscaping costs came in Q1 2021 at $16,412 and $16,104 per home, respectively. Roofing, drywall, and landscaping costs all had their largest quarter-to-quarter increase from Q2 into Q3 in 2020 while the largest quarterly increase for insulation and appliance costs happened sooner and in 2021, respectively.
Our analysis does not consider the relative square footage involved in any specific project. While this is a factor in the total budgeted cost for these categories, between synthesizing data from over 14,000 home building projects and the average square footage of a US home staying flat between 2020 and 2021 we believe the impact of variations in home square footage to be negligible.
Framing costs, both material and labor, are up year-over-year
The average framing costs for home builders rose from 2020 to 2021. The fluctuations in lumber prices have been widely reported over the last two years but the direct impact on the budgets of home builders came in the form of a 26% or $8,533 increase in framing material costs. In this same period, compared to other year-over-year costs, the cost of framing labor stayed flat with only a 3%, or $708, increase. This 3% increase suggests that the cost of inflation is more likely a driving factor than any substantive labor market or availability trends.
Where we got our numbers from
CoConstruct helps over 100,000 building professionals manage clients and trade partners, schedule work, track financials, and more. Aggregating and analyzing the data builders input into the system, CoConstruct can identify construction industry trends and highlight emerging issues. By using and sharing this information CoConstruct is doing its part to eliminate the chaos of project management and help create rewarding experiences for both home builders and clients.