06/12/2026
Something has to give, Increasing regulatory costs continue to deepen housing affordability crisis: NAHB
New study finds the cost of regulations has risen 40% in the past five years and now adds an estimated $131,734 to the price of the average home
Jeff Bond
June 12, 2026
Construction, Real Estate, Regulation and Compliance
Regulatory costs for building a home have grown by 40% during the past five years, increasing home prices and hindering efforts by builders to erase the nation’s housing shortfall, according to a new study from the National Association of Home Builders (NAHB).
The study, which surveyed home builders and developers across the country, found that regulations at the federal, state and local levels add an average of $131,734 to the cost of a new single-family home. Those charges amounted to 26.4% of the average new-home sale price of $499,500 in January of this year, according to the NAHB.
The regulatory costs are not only pushing housing prices higher, but they are also making it difficult for home builders to reduce the nation’s housing shortage, which is estimated to be 1.2 million units.
“This study illustrates how excessive regulation is deepening the nation’s housing affordability crisis and making it harder for builders to deliver the affordable, attainable housing that our nation sorely needs,” said NAHB Chairman Bill Owens in a press release. “Policymakers should remove unnecessary and costly regulations that are pricing buyers out of the market and slowing construction of new homes and apartments.”
NAHB estimates that $84,939 of the price of a new house is the result of regulatory charges incurred by the builder during construction. An additional $46,795 in charges stem from regulations overseeing the land development phase of the project. The study found that the regulatory burden on a new home has increased 40% in the past five years, jumping from $93,870 in 2021 to $131,734 in 2026.
The cost of regulations linked to a new home’s land development has decreased as a percentage of the overall project cost during the past five years, falling from 10.5% in 2021 to 9.4% in 2026. At the same time, regulatory costs as a percentage of the overall project during the construction phase have increased from 13.3% to 17% during the same five-year period.
Changes to building codes during the past 10 years was the single highest regulation charge, estimated to cost a home builder $40,288, according to the NAHB study. Fees paid by the builder after purchasing the lot was the second-highest charge at $20,154. The third most expensive regulation category was architectural design standards beyond the ordinary, which added an average of $16,117 to the price of a new home.
