In response to frequent requests from its members, NAHB Economics recently released its estimates of new single-family home prices by state and metro area. The most expensive new single family homes are built and sold in three Northeastern states: Connecticut, Massachusetts and New York – with their respective median new single-family home prices of $491,425, $432,724 and $411,169.
District of Columbia is likely to be at the top of the list as well but the permit data for DC are highly volatile, have large margin of error and could not be used to estimate median new home prices. The least expensive new homes are in Delaware where half of all new single-family homes are sold for less than $152,017, that is less than a third of what most new home buyers pay in Connecticut. Mississippi, Kentucky and West Virginia also register median new home prices under $200,000. The map below helps visualize the wide cross-country differences and reveals a familiar geographic pattern with least expensive new homes being built in the south central states.
The distribution of new home prices by metro area largely mirrors the state pattern with most expensive new homes clustered in the coastal areas of California, Hawaii and the Northeast region. Bridgeport-Stamford-Norwalk, CT metro area registers the highest median new home price in the nation with half of all new single-family homes sold for more than $878,625. Barnstable Town, MA and Napa, CA metro areas are distant second and third with median new home prices of $616,381 and $580,197, respectively. The least expensive new homes are in Brownsville-Harlingen, TX metro area, where half of all new single-family homes is built and sold for less than $116, 704.
To estimate median new home prices by state and metro NAHB Economics relies on data from Census Bureau’s Building Permits Survey and Survey of Construction (SOC). The Permits Survey provides both the number and aggregate value of new housing units authorized by building permits and, thus, allows calculating average permit values for all metro areas and states. For metro areas where average permit values are highly volatile and likely to have a large margin of error, the averages are smoothed out across most recent years. However, permit values do not include brokerage commissions, marketing/finance costs, the cost of raw land and may not include the cost of lot’s development. These additional costs are likely to differ across geographic areas but not available for metro areas and states. To account for these additional costs, NAHB Economics estimates ratios of median new home prices to average permit value for nine Census divisions available in the SOC and then uses the division-wide ratios to convert average permit values into median new home prices.
By Natalia Siniavskaia – NAHB Eye on Housing