Government regulations are adding nearly $132,000 to the cost of a newly built home, according to a new report, further fueling affordability concerns as many Americans struggle to become homeowners.
The study, commissioned by the National Association of Home Builders (NAHB), found that regulations at the federal, state and local levels account for an average of $131,734 per new home—roughly 26.4% of the final sale price. Based on the average new-home price of $499,500, the report says regulatory costs have increased 40% since 2021, marking the largest jump between consecutive NAHB surveys since the organization began tracking the data in 2011.
The findings come as housing affordability remains a major national issue. High mortgage rates, elevated construction costs and limited housing inventory have pushed homeownership out of reach for many families, with housing expected to remain a prominent issue ahead of the 2026 midterm elections.
NAHB argues that growing regulatory burdens have become a significant contributor to both rising home prices and the nation’s housing shortage. The association estimates the U.S. is currently short by approximately 1.2 million homes, saying excessive regulations make it more difficult and expensive for builders to increase supply.
“We update our study every five years, and this reinforces what we have been saying all along—that the cost to build a single-family home in this country continues to escalate and exacerbate the housing affordability crisis,” NAHB President and CEO Jim Tobin told Fox News Digital. “We’re up 40% over the last five years, and now regulatory burdens at every level of government are totaling more than $130,000 for the cost of a new home.”
According to Tobin, regulatory costs vary significantly by region. States in the Southeast—including Texas, Florida and the Carolinas—generally have lower regulatory costs than states such as California, New York, New Jersey and Illinois.
While Tobin expects regulatory costs to continue increasing, he said policymakers could help slow that trend through targeted reforms. He highlighted the bipartisan 21st Century ROAD to Housing Act, which aims to streamline permitting, reduce barriers to new construction and expand financing options to boost housing supply.
“Anything we can do to lower that cost, I think would be really important,” Tobin said. “While regulations play an important role in protecting public health and safety, unnecessary requirements can have unintended consequences. While regulations are important, they can go too far. We need to make sure health and safety are protected while getting rid of the more onerous and costly regulations that do nothing more than drive up costs and keep Americans out of homeownership.”
The White House and the Department of Housing and Urban Development did not immediately respond to Fox News Digital‘s request for comment.
The report is based on surveys of 54 land developers and 337 single-family home builders conducted in March 2026.
Source: Fox News
