A new paper by economist Paul Emrath of NAHB’s Economics and Housing Policy Group estimates the share of an average, single-family home’s price that is due to costs associated with government regulations. Using responses from the NAHB/Wells Fargo Housing Market Index survey and average long-run assumptions about terms on construction loans, profit margins, and time lags between different phases of the home building process, the paper finds that 25% of the price of a built-for-sale single-family home is due to government regulations. Nearly two-thirds of this impact is due to regulations that affect the developer of the lot, with the rest due to regulations that fall on the builder during construction.

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