What is Driving New Construction Home Prices Up?

We have been trying to figure out why home prices have been going up, and it turns out a big part of it is the cost of the lots.

In one of the neighborhoods he builds in, the new section’s lots went up $80,000, that’s a 52% jump from before! On top of that, materials like concrete, lumber, paint, drywall, and other construction costs have also gone up anywhere from 1–6%, depending on the item.

So here’s the deal: the builder buys the lot, buys the materials to build the home, and after all that, they have to price the home higher to make a profit.

If you’ve been wondering why new construction is getting more expensive, now you know why! See the graph attached for a breakdown of cost increases from 2024-2025.