The National Association of Home Builder’s 2015 survey of building costs tries to put a percentage of each stage of constructing a new home. It is very impressive and I have to believe quite accurate.
But do these numbers reflect the cost of building a modular home? The answer is yes.
Even though a lot of the work to produce the home part of the entire project is built somewhere off site and shipped in, the costs are the same. Remember, this is a percentage report and not a dollar one.
Modular does have a huge freight cost and crane charges incurred with each house but these costs find their way into site built homes as well. If one were to add up all the costs in time, material and labor for trips back and forth to the job by site builders, we would probably find they are about the same as the added modular delivery and set charges.
Here is a list of the results from the NAHB survey.
- The average size of the home was 2,802 square feet
- The average lot size was 20,129 square feet, about half an acre
- The average lot cost was $4.20 a square foot
- The average price of the new single family home was $468,318
- The average construction cost of a single family home was $289,415
- The cost of construction rose from $80 per square foot in 2011 to $95 per square foot in 2013 to $103 per square foot in 2015
- The total construction cost of a new home accounted for 61.8% of the sale price. The finished lot accounted for 18.2%
- Builder profits were 9.0%
- Overhead and general expenses, which were at an all-time low of 4.13% in 2013, rebounded to a more historically typical 5.6%
- The share of construction costs going to excavation, foundation, concrete, retaining walls and backfill jumped to 11.3%
- Of the eight major stages of construction, interior finishes 29.6% accounted for the largest share of construction costs, followed by framing at 18%, exterior finishes at 15%, major system rough-ins at 13.1%, final steps at 6.8% and other costs at 0.5%
Making this work for a modular home builder requires you to break your costs down, assign a percentage to each of the eight major steps and then plug in where these costs occur, at the factory or at the job site.
This requires at least 6 completed homes over the past year to have any chance of being accurate. And it’s only accurate for your business.