TUMWATER, Wash. — A new report from the Washington Center for Housing Studies shows that the cost of building homes in Washington state is significantly higher than the national average, primarily due to market conditions and regulatory hurdles. The study, titled Cost of Constructing New Homes in Washington State (2024), sheds light on the escalating expenses facing homebuilders in the state.

The Building Industry Association of Washington (BIAW) has emphasized the findings, which reveal that it costs an average of $309 per square foot to build a single-family home in Washington, resulting in a median sales price of $690,701 for a 2,505-square-foot home. In comparison, the National Association of Home Builders reports that the national average for a similar home is approximately $428,215.

Washington's townhome prices are also considerably higher than the national average, with an average cost of $404 per square foot and a median sales price of $592,195. Additionally, raw land acquisition costs in several key counties have soared, with a median lot price of $286,996.

The Impact of Regulatory Costs

One of the major contributing factors to the inflated construction prices is regulatory costs. The BIAW estimates that land-use regulations and labor laws account for 23.8% of the final price of a new home, roughly $164,386. The association warns that potential new tariffs and regulatory changes may drive prices even higher, further putting homeownership out of reach for many Washington families.

“Washington families are struggling to afford homeownership due to rising construction costs and burdensome regulations,” said Kent Arola, president of the BIAW. “We need smart policies that encourage housing development while keeping costs manageable.”

The BIAW is calling for legislative actions to address the affordability crisis, citing several bills currently under consideration, including Senate Bill 5184, which seeks to modernize parking regulations, and House Bill 1096, which would streamline administrative lot splitting. Additionally, Senate Bill 5729 aims to expedite the permitting process to reduce delays and associated costs in housing development.

Addressing the Skilled Labor Shortage

In addition to policy changes, the BIAW is also advocating for the expansion of apprenticeship programs to address the ongoing skilled labor shortage in the construction sector, which further exacerbates cost increases. The lack of skilled workers drives up labor costs, which contributes to the overall rise in homebuilding expenses.

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

The BIAW’s recommendations highlight the need for a more balanced approach to regulation and development in order to maintain affordable housing options for residents of Washington state.

Rising Home Prices: A Long-Term Trend?

While this report paints a clear picture of rising construction costs in Washington, it’s part of a broader trend that has seen home prices climb steadily in recent years. The issue is not confined to Washington; similar price increases have been observed across the country. However, in Washington, the combination of strict regulatory controls, high land costs, and an underdeveloped skilled labor pool have compounded the challenges facing homebuyers and builders alike.

The BIAW report suggests that these high construction costs will continue to pose a challenge to future housing development unless significant legislative changes are made to address the underlying causes of the problem.

A Call to Action for Policymakers

As the housing market in Washington continues to tighten, the BIAW urges state leaders to act quickly in implementing reforms. Addressing the regulatory barriers to homebuilding and improving workforce development will be key to easing the strain on families hoping to enter the housing market in the coming years. Without action, the affordability gap is likely to continue growing, leaving many Washington residents unable to afford the homes they need.

About the Building Industry Association of Washington (BIAW)

‍The BIAW is a statewide trade association representing the building industry in Washington. Founded in 1959, the association advocates for policies that support the homebuilding industry, promotes workforce development, and works to create affordable housing solutions for all Washington residents. For more information on the BIAW’s recommendations and the full findings of the report, visit https://www.nbcrightnow.com/news/washington

Originally reported by Mark Rattner in Non Stop local News.