The $132,000 Question Georgia Homebuyers Are Paying to Answer

In the ongoing debate over why homeownership remains out of reach for so many Georgia families, we have the usual explanations: higher interest rates, institutional investors buying up homes, global supply chain disruptions and the rising cost of labor. But an updated study from the National Association of Home Builders (NAHB) puts a new dollar figure on the cost of government regulations nationwide.

According to the latest report published in June 2026, the combined cost of federal, state and local government regulation now accounts for $131,734 of the average new home’s purchase price of $499,500. That is more than a rounding error; it represents 26.4% of the final cost of a new single-family home—up nearly three percentage points from 2021 and double the figure recorded in 2011.

These national figures are also consistent with what we have seen when assessing the regulatory cost to build a new home in Georgia. A 2022 study conducted by my organization, the Georgia Public Policy Foundation, used the same NAHB methodology and found that regulation accounted for 26.9% of the price of a new single-family home in Georgia. That figure was already higher than the national average at the time. 

In other words, Georgia homebuyers were starting from a worse baseline than most of the country, and the national trend since then has only moved in the wrong direction.

To be clear, neither study argues for eliminating regulation. Communities have legitimate interests in how land is developed. Safety standards protect workers and future homeowners alike. Both studies are explicit on this point. 

What they demonstrate, however, is that the cumulative weight of regulatory costs has become a significant, measurable barrier to housing affordability.

Consider where the costs accumulate. Nationally, the largest single line item remains changes to the building code (such as energy efficiency standards) over the past decade, adding an average of $40,288 to the price of a new home, with 97.4% of national homebuilders reporting these updates increased their costs. 

Fees paid by the builder after purchasing the lot add another $20,154. Architectural design standards beyond the ordinary, such as prohibitions on vinyl siding or four-sided brick mandates, tack on $16,117 more.

Georgia builders and developers previously reported even broader exposure to these regulations than their national counterparts. For example, Georgia builders were nearly 14 percentage points more likely to encounter aesthetic design standards than the national average. 

The costs begin long before a foundation is poured. A developer applying for zoning approval initiates a process that, nationally, averages 15 months before site work can begin—followed by another 11.5 months from site work to when a finished lot is sold to a builder. 

Every Georgia developer surveyed reported that complying with regulations caused delays. All of those carrying costs, accruing on construction loans from the moment the first dollar is drawn, are baked into the price a family pays at closing.

That price compounds once a buyer walks into a bank. At today’s 30-year fixed mortgage rate (6.75%), even a modest reduction in the regulatory cost of new home construction, from 26.4% to 20%, would lower the purchase price by roughly $32,000. Assuming a 20% down payment, that translates to about $166 less per month on a mortgage payment—nearly $2,000 a year—and nearly $60,000 in savings over the life of the loan. 

Put differently, a Georgia family isn’t just absorbing the sticker price of regulation; they are financing it for three decades. What began as a permitting fee, an energy efficiency code update or a design mandate is now a fixture in the household budget long after the builder has moved on to the next project.

That is money that could have gone toward keeping a home within reach of a first-time buyer.

Georgia once held a well-earned reputation for housing affordability. That has since eroded. The number of building permits issued annually has never recovered to pre-Great Recession levels, even as the state continues to absorb hundreds of thousands of new residents. Georgia’s housing affordability problem is, at its core, a supply problem. And regulation is a material constraint on supply.

None of this requires choosing between consumer protections and affordability. The question is whether the process of getting there can be made more consistent, more predictable and less costly for the families waiting on the other side of it.

The General Assembly has begun to take this seriously, with recent permitting reform legislation aimed at tightening approval timelines and improving transparency. The data—both nationally and in Georgia—makes the case for urgency. 

The $132,000 embedded in the average new home price is not inevitable. Much of it is a policy choice.