Government regulations are adding an average of $131,734 to the cost of newly built homes, a figure that represents 26.4% of the final sale price and marks the largest increase between consecutive National Association of Home Builders (NAHB) surveys since 2011. The findings come as housing affordability remains a significant concern nationwide, with elevated mortgage rates and limited inventory making homeownership unattainable for many families.
According to the NAHB report, regulatory costs have increased by 40% since 2021. "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," said NAHB President and CEO Jim Tobin. He noted that these escalating costs contribute to a structural housing shortage of an estimated 1.2 million homes in the U.S.
The report, based on surveys of land developers and single-family builders conducted in March 2026, aims to quantify the cumulative effect of regulations on housing affordability. The NAHB clarified that the study is not an argument for eliminating all regulations but rather for reforming those deemed overly burdensome.
"While regulations are important, they can go too far," Tobin stated. "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."
Regulatory costs can vary significantly by region. States in the Southeast, including Texas, Florida, and the Carolinas, generally have lower regulatory environments compared to states like California, New York, New Jersey, and Illinois. Tobin expressed optimism that policymakers can help slow the pace of rising regulatory costs through reforms and pointed to bipartisan efforts such as the 21st Century ROAD to Housing Act, which aims to streamline permitting and reduce barriers to new construction.
The issue of housing affordability is anticipated to be a key focus in the upcoming 2026 midterm elections, as lawmakers face increasing pressure to address the crisis. The White House and the Department of Housing and Urban Development did not immediately respond to requests for comment on the report's findings.