US and the housing crisis: In some places it’s easier to build than to buy

The One World Trade Center seen from the Empire State Building. — © AFP

There are some parts of the U.S. where land is plentiful but available housing is limited. A new study reveals the states where building a house is easier than buying one.With this assessment, Hawaii ranks first, with the most expensive house prices and moderate land prices. 

In contrast, New York has the lowest average land prices, at $5,187, making it the sixth most beneficial state for building a house rather than buying one. New Hampshire and Utah, on the other hand, are tight, with the lowest architectural and design fees at 12,000.

The review comes via the company Highland Cabinetry, who analysed allthe US states to identify those where it’s easier to build a house rather than buy one. The study is based on a comprehensive analysis of housing-related costs across the U.S., focusing on factors such as house sale prices, land prices per acre, architectural and design fees, construction costs, and utility expenses.

The data points were synthesized into a composite score for each region, enabling a clear comparison of the overall cost of homeownership across different areas in the U.S.

The outcome is:

Hawaii leads the rankings as the state where it’s easier to build a house than to buy one, with a composite score of 50. The state stands out with the highest house sale prices at $856,327, significantly contributing to the high homeownership cost. Despite the high property prices, land in Hawaii is moderately priced at $24,170 per acre, offering some relief for those considering building. 

California ranks second in the study with a composite score of 44.2. The state’s average house sale price is $782,695, making it one of the most expensive states to purchase a home. However, the land price per acre is relatively lower at $15,445, which, when combined with high architectural and design fees of $35,000, suggests that building a house could be a more cost-effective option. 

Massachusetts comes in third with a composite score of 37.3. The average house sale price is $609,415, placing it among the higher-priced states for homeownership. Land prices per acre are the highest on the list at $48,830, which could make building a home more costly unless offset by lower design and construction costs. Architectural and design fees are relatively moderate at $22,000, and construction costs are twice lower than in Hawaii at $275 per square foot.

Washington ranks fourth with a composite score of 31.8. The average house sale price in Washington is $588,986, which is substantial but not as high as in other states. The land price per acre is moderate at $21,467, making land acquisition feasible for those looking to build. Architectural and design fees are among the lower end at $19,000, and construction costs are the second lowest on the list at $200 per square foot. Utility hookup costs are the lowest, tied with Colorado and Utah at $360. 

New Jersey takes the fifth spot, with a composite score of 31.4, where both buying and building a home come with balanced costs. The average house sale price is $508,430, and the land price per acre is $17,739, offering a reasonable option for those considering building. Architectural and design fees are set at $19,000, tied with Washington, while construction costs are $240 per square foot, both of which are moderate. 

Overall, the current picture in the U.S. for affordable housing is grim.