RESIDENTIAL CONSTRUCTION COSTS at all time high is a factual reveal of what’s going on right now in America. 8/13/2024.
Above you will see the proof from the Federal Reserve Economic Data, as published by the Federal Reserve Bank of St. Louis, USA. Courtesy of the Federal Reserve.
Look closely at the above graph of escalating construction costs. You will see that starting in the 4th quarter of 2020, the costs of residential construction skyrocketed up through now, the 2nd quarter of 2024. As a matter of fact the cost of residential construction has risen 20.8% in the last 3-1/2 years. So the house that cost about $396,000 in late 2020 is now about $501,700.
Assign political blame if you like.
Blame builders and developers.
Blame whatever you like.
Construction costs are real.
No amount of hand-wringing and screaming will change anything.
As an architectural company, we receive many phone calls and emails each year, wherein possible clients tell us that they are going to build their dream homes for $100 or $200 per heated SF (Square Feet). Unfortunately, that’s not been possible for a very long time.
And for those people who believe they can simply “wait for prices to come down”, take a good look at that FRED chart above (that’s the Federal Reserve Economic Data chart) since 1963. There aren’t many dips. Perhaps a few. But we don’t know anyone that can predict when those will happen. Can you? So: the likelihood of construction costs coming down are slim. And knowing when that might happen is impossible to estimate. So don’t try to do that.
Here’s reality: construction costs for houses are probably going to just keep going up. Not down. So if you decide to build today, that will likely cost less than building 2 years from now.
Now then, those costs above are for mainly conservative mainstream conventional housing. Custom Architect-designed houses will typically be more. As in twice as much or 3 and 4x as much or even more, depending on your site, features, materials and availability of contractors. Welcome to the future.
Your desire for timber frame or huge square footage or lots of stone or other high-end materials and features DOES cost more. Much, much more. Not like choosing the color of paint on a wall. Let your Architect help you make sensible choices. Particularly with construction costs so high these days.
HOME ARCHITECTS works on each project to use durable materials and systems that deliver the best value possible. And that can help to the tune of tens of thousands, hundreds of thousands, or even millions of dollars in construction cost savings and in operation cost savings over time. Let us know if we can value-engineer a design solution for you. rand@homearchitects.com