New Homes in the U.S. Grow Pricier

New single-family homes built and sold in the U.S. are growing increasingly pricey. While in 2002, the average price of such a home was $228,700, that had increased to $464,200 in 2021. Meanwhile, consumer prices for city dweller rose by 48 percent in the same time frame, making the average 2020 home still more than $125,000 pricier than its 2002 counterpart after adjusting for overall inflation.

The segment of expensive houses costing more than $400,000 each accounted for only 9 percent of new homes sold in the U.S. in 2002. In 2021, the segment had grown to 50 percent. The share of houses costing less than $150,000 decreased during this time from 30 percent to under 1 percent, according to the Census Bureau.

The financial crisis and the U.S. housing bubble saw the number of affordable new homes in the U.S. rise again in 2008 and 2009, but only momentarily. Buyers have been shelling out more over the years for the same standard houses, but at the same time, the average new house has also grown larger and more luxurious with more space and more amenities translating to bigger price tags. In 2021, the speed at which housing grew pricier accelerated as the Covid-19 pandemic cause a great reshuffle in the housing market and inflation started to take off. As high price increases continued through 2022, the year can be expected to bring more of the same developments for the cost of new single homes.