New homes in Washington cost hundreds of thousands more than the national average. The reasons why might surprise you.

The Washington Center for Housing Studies released a new report, Cost of Constructing New Homes in Washington State (2024).

The study highlights increasing costs associated with single-family homes and townhomes, underscoring the significant financial impact of regulatory burdens and market conditions.

Key Findings:

• The  average cost to build a single-family detached home in Washington is $309 per square foot, with a median sales price of $690,701 for a 2,505 sq. ft. home. In contrast, the cost to build an average single-family home of a similar size in the US is $428,215, according to the latest study from the National Association of Home Builders.
• Townhome construction averages $404 per square foot, with a median sales price of $592,195.
• The median cost to acquire raw land in key counties is $286,996 per lot.
• Regulatory costs imposed by local, state, and federal governments account for 23.8% of the final home price, totaling an estimated $164,386 per new home.

Regulatory Challenges Driving Up Costs
The report reveals how labor laws, workers’ compensation policies, impact fees,and land-use regulations contribute to Washington's rising home prices. With new tariffs and legislative changes on the horizon, the Building Industry Association of Washington (BIAW) warns that additional cost increases are likely.

“Washington families are struggling to afford homeownership due to rising construction costs and burdensome regulations,” said BIAW President Kent Arola or Executive Vice President Greg Lane. “We need smart policies that encourage housing development while keeping costs manageable.”

Legislation can help
In the report, BIAW called out specific legislative action to address affordability, including passage of bills such as:

·        Senate Bill 5184, sponsored by Sen. Jessica Bateman, which seeks to modernize parking regulations; and

·        House Bill 1096, sponsored by Rep. Andrew Barkis,which allows for administrative lot splitting to open up more buildable land.

·        Senate Bill 5729, sponsored by Sen. Chris Gildon,which allows a licensed and insured design professional stamp to represent a complete permit application which should speed up permit approval timelines.

BIAW also continues advocating for expanding apprenticeship programs to address the skilled labor shortage in construction.

“As demand for housing grows, we must ensure our state’s policies do not price families out of the market,” Lane/Arola said. “This report provides critical insights for policymakers looking to support a thriving housing market.”

About BIAW
BIAW is the state’s largest trade association representing more than 8,200 members in the home building industry. BIAW advocates for pro-housing policies that promote affordability and economic growth across Washington state.

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