Construction cost breakdown by trade
The following sections describe the methodology of the survey and discuss the results in construction cost breakdown by trade detail. The sample was stratified by size of the builder based on number of starts and region of the country the sample being proportional to housing starts in each of the four principal Census regions.
Over the years NAHB has modified the survey and its methodology. Inthe survey methodology changed to provide a better, more representative sample of single-family construction across the country. InNAHB developed a different construction cost breakdown that more closely resembles the steps which builders take when building a home. Prior tothe breakdown had 29 construction cost breakdown by trade. Inwe created eight subcategories for each of the major stages of construction, with a total of 36 sections grouped under the appropriate construction stage.
The new format simplified data collection, greatly reducing the number of follow-up calls needed to clarify and verify builder responses. Respondents were asked to provide information about the average home built by their firms during Usable responses were received from 33 builders. Table 1 shows the detailed results of the construction cost survey. These results are national averages; the survey sample is not large enough for a geographic breakdown.
Building practices, construction cost breakdown by trade cost of labor, the cost of land, and to some extent the cost of the materials can vary from place to place and depend on the nature of the particular home being built. Although the survey can provide a broad idea of construction costs for an average home, it is not a perfect tool for estimating construction cost breakdown by trade for a particular house.
The costs include all the costs paid by a builder that go into a particular item, including labor costs paid directly by the general contractor, the cost of hiring subcontractors, and the cost of materials however they are purchased.
The average size of the home in the construction cost survey was 2, square feet. The average square feet has been steadily rising since its initial drop from 2, square feet in to 2, square feet in The average floor area peaked at 2, square feet inthen dropped to 2, square feet infollowed by a steady increase to 2, square feet in Graph 1.
The average lot size in the construction cost survey was 20, square feet—about a half an acre 21, square feet. The average construction cost breakdown by trade size, which dipped to about a third of an acre inwas about half an acre in both and 21, square feet, and 20, square feet, respectively.
Respondents were asked to breakdown the sales price of an average single-family home built by their firm into seven categories: Table 2 contains historical information on the sales price construction cost breakdown by trade of a single-family home. Although the sales price rose between andthe construction cost distribution is strikingly similar between the two years. The total construction cost of a home accounts for The finished lot accounts for Inbuilders spent the same share of construction cost breakdown by trade price on lot costs, but got a larger lot—half an acre incompared to a third of an acre in Builder profits were 9.
Although the average sales price has been rising, this reflects rising costs rather than an increased rate of profit. During the downturn many builders had to reduce operations and layoff office staff, which resulted in low overhead and general expenses.
Inoverhead and general expenses, which was at an all-time low of 4. The remainder of the sales price is divided between overhead sales commission 3. Each of these shares construction cost breakdown by trade similar to the breakdown in The CODB is based on the income statements for a firm, rather than the price of an average house.
Although the surveys are not perfectly construction cost breakdown by trade, the sales price breakdown in the Cost of Construction Survey is generally consistent with the results of the CODB. Also, the profit in the construction cost survey refers to an average single- family home built by the firm; whereas the profit in the CODB survey refers to all the homes built by the firm, both sold and unsold. This works out to an annual rate of inflation of just under 9 percent between andand a little over 4 percent between and Responding to special questions on the HMI survey in June and July ofbuilders reported that on average, over the previous year, labor costs increased by 3.
Historically, of the detailed items listed in the NAHB cost survey, framing and trusses have always accounted for the largest share of construction costs. This share remained essentially unchanged construction cost breakdown by trade NAHB builders have been reporting construction cost breakdown by trade in the cost of lumber since Responding to special questions on the HMI in July65 percent of builders reported that the price of trusses had increased over the last 12 months, and 60 percent reported that the price of framing lumber had increased over the last 12 construction cost breakdown by trade.
Many NAHB builders have also had trouble finding framing crews. Responding to special questions on the HMI given in June67 percent of builders reported a shortage of directly employed framing crews, and 73 percent report a shortage of subcontractor framing crews see the July 3 Eye on Housing post. The share of builders reporting a shortage of framing crews both directly employed by their firm and subcontracted has steadily risen, from 30 and 35 percent, respectively, since June of In andthe share was 7.
Many NAHB builders have reported price increases in concrete products recently. According to special questions on the July HMI survey, 84 percent of builders reported an increase in the price of cement over the past 12 months, 86 percent an increase in the price of ready-mix concrete, and a 69 percent increase in the price of concrete brick and block.
According to the PPI inputs to construction series, between July and Julythe cost of cement increased by 18 percent, and the cost of concrete products increased by 13 percent, while the cost of inputs into new residential construction materials overall only rose about 3 percent. In addition to material costs, NAHB builders are also having trouble finding excavators. According to the HMI special questions, the share of builders reporting a shortage of excavators rose from 14 percent in June of to 37 percent in June for direct labor, and from 17 percent to construction cost breakdown by trade percent for subcontractors.
Of the 8 major stages of construction, interior finishes at See Table 1 for a full breakdown. There construction cost breakdown by trade major changes to the construction cost breakdown in Some of the categories either remained the same or were similar to past years.
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