Cost to Build a Home in a Prevailing Wage State

Responding to Click-Bait Series

Go Banking Rates

Go Banking Rates as an entity ( or GBR) is a powerhouse of click-bait.  In Feb/March 2019 GBR published a study of the cost of building a house from existing plans in all 50 states.  Land is not included.

The GBR methodology took three factors into account:

  1. The average cost to build a new one-story, 1,800-square-foot home with a half-finished basement, sourced from the Lincoln Institute of Land Policy.
  2. The average cost to build a house of all sizes in the three largest cities in each state, sourced from National Association of Home Builders and Sperling’s Best Places.
  3. The mean hourly wage for construction laborers, sourced from the Bureau of Labor Statistics.

New Jersey made the Top 10 Most Expensive list.  We clocked in at #7.  Hawaii is an island, so materials have to be shipped in.  We’re ~$160K less than California.  That may in part be the earthquake requirements.  New Jersey ~$88K more expensive than Mississippi’s costs.

  1. Hawaii: $475K
  2. California: $439K
  3. Alaska: $314K
  4. Washington: $304K
  5. Massachusetts: $300K
  6. Connecticut: $299K
  7. New Jersey: $280K
  8. New York: $274K
  9. Delaware: $244K
  10. Illinois: $239K

Here are a couple things worth knowing about building in New Jersey:

  • New Jersey building codes take energy efficiency seriously.
  • New Jersey is a prevailing wage state.  Prevailing wage is what the Bureau of Labor Statistics will track.  Individual home building can be different.
  • New Jersey pricing varies considerably, even within small areas.

Twenty-three States do not have prevailing wage laws. You’ll see a number of these states show up on the Cheapest list.

These states are Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, Virginia, West Virginia, Wisconsin.   For completeness, here are the results of Go Banking Rate’s study on the least expensive housing costs.

  1. Mississippi: $192K
  2. Michigan: $195K
  3. Ohio: $197K
  4. West Virginia: $203K
  5. Oklahoma: $206K
  6. Arkansas: $208K
  7. Iowa: $210K
  8. Nebraska: $215K
  9. Kansas: $219K
  10. South Dakota: $228K