Where does a new home's price go, and which levers move it most?
research/house-cost
Where does a new home's price go, and which levers move it most? Share-anchored model (NAHB 2024): size moves the price most (87.8 to 112.0 for 1,600 to 2,400 sq ft), then storeys, finish level and lot; a 14% framing-lumber cut is worth 0.85% of price (2.4% with labour). Index not dollars, assumed driver splits. Milestone 4 of track 12.
What it found
A driver-based price model anchored on NAHB's 2024 cost shares (construction 64.4% of the price, framing 16.6% of construction, lot 13.7%, profit 11.0%). Each construction stage scales with floor area, footprint or wall area, and the model reproduces every NAHB share at its 2,000 sq ft reference house. In a sweep, size moves the price most (index 87.8 to 112.0 for 1,600 to 2,400 sq ft), then one against three storeys (111.6 to 97.6), finish level, lot price and foundation type. A 14% cut in framing lumber, the gap between house-plan's default and best plans, is worth only 0.85% of the price, or 2.4% if it also cuts framing labour by 20%. Stylised: a price index, not dollars; the stage-driver splits and lever ranges are my assumptions; the Census reconciliation and a priced takeoff are not done.
A figure from its own output
Paper, code and results
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Produced with AI assistance (Claude). Results are from the code in this repository and are simulated or stylised unless the abstract says otherwise; nothing here implies affiliation with or endorsement by any lab, researcher or company cited. MIT licensed.