Today’s letter is brought to you by Prophetic!

Government regulations now account for more than a quarter of the average sales price of a newly built single-family home in the U.S., according to a recent study from the National Association of Home Builders (NAHB).

NAHB estimates that regulations imposed at the federal, state, and local levels now add $131,734 to the cost of an average new single-family home—equal to 26.4% of the home’s final price. That estimate is based on an average new-home sales price of $499,500 as of January 2026, according to NAHB’s data series.

In 2026, NAHB estimates regulatory costs average $131,734 per home—up from $93,870 in 2021. Much of that big jump comes via lagged transmission following the sharp overheating in home prices and materials that occurred during the Pandemic Housing Boom.

NAHB calculates average regulatory costs by surveying developers and builders on the direct and indirect costs associated with regulation—from zoning, permitting, and impact fees to code compliance and delays during development and construction. Those responses are considered alongside assumptions around timelines, financing, and builder margins to estimate how much regulation contributes to the average final sales price of a new home.

In its June 2026 report, NAHB estimates that regulation during land development rose from $41,330 in 2021 to $46,795 in 2026, an increase of +13.2%. Meanwhile, construction-related regulatory costs surged from $52,540 to $84,939, a +61.7% increase.

It should also be considered that regulatory costs aren’t just direct expenses like fees or code compliance—they also show up in the form of time. Based on the 2026 survey results, it takes an average of 15.1 months to move from zoning application to site work, followed by another 11.5 months before a finished lot is sold to a builder. 

Those long development timelines can increase carrying costs and make it harder for builders to respond quickly when housing demand rises.

Among individual categories, changes to building codes over the past decade stand out as the largest cost driver. NAHB estimates code changes now add $40,288 per home, up from $24,144 in 2021—a +66.9% increase. Builder-paid fees after lot acquisition rose +65.4% to $20,154, while architectural design standards climbed +49.3% to $16,117.

In fairness, it's worth noting that NAHB is a trade association representing homebuilders. It's also worth noting some of these regulatory costs fund public infrastructure and services—including roads, water and sewer systems, schools, parks, and stormwater management—or are intended to improve building safety, and energy efficiency.

On Tuesday, Zillow announced it just laid off over 500 employees. Before the announcement, Zillow had around 7,000 employees.

On Friday, November 6th in NYC, the ResiClub team will lead a day of insightful discussions on housing market trends and strategies impacting the future of the U.S. housing market, homebuilding, and single-family rental landscape. ​

​​A few of the top ResiDay 2026 speakers 👇

If you book by August 31, you can secure Early Bird I pricing at $199. After that, the price increases to $299, and tickets purchased after October 1 will cost $399.

ResiClub members can find details about their discounted ticket options here.