Why New Homes Are Expensive.
New-home prices have risen higher than anticipated when comparing those built in 1970 to homes built today with similar characteristics. According to an analysis by economist Tom Lawler, new homes are selling for an average of more than double what they sold for in 1970, after adjusting for inflation. New-home prices should be up only 23% from 1970. The dramatic price increase over the past 45 years is mostly because homes have gotten bigger and fancier. Homes built now are about 50% bigger that the average of 1,560 square feet in 1974.