Each $1,000 increase in the cost of a new home forces 206,000 prospective buyers out of the marketplace, according to a new study from NAHB Economics.
Palm Coast, FL – August 7, 2014 – Each $1,000 increase in the cost of a new home forces 206,000 prospective buyers out of the marketplace, according to a new study from NAHB Economics. The study estimates that fully 25% of the final price of a new home is the result of regulations imposed at all levels of government.
The costs begin accruing when developers apply for land use and site development approval and can include costs for concurrency, impact fees, permitting and inspection fees, water hookup charges, etc. A single-family home in Palm Coast requires about $15,000 in impact and water/sewer hookup fees alone.
Each $833 increase in fees results in a $1,000 increase in the price of a new home. That’s because any construction cost increase causes related variable costs such as financing, closing, insurance, and commissions to rise as well.
“This study highlights the real effects that building regulations have on housing affordability,” said NAHB Chairman Kevin Kelly.
“Local, state and federal government officials need to know that higher regulatory costs have real consequences for working American families. These regulations end up pushing the price of housing beyond the means of many teachers, police officers, firefighters and other middle-class workers.”
Read the full report by clicking below:
Report available to the public as a courtesy of HousingEconomics.com