Housing affordability remains a prominent issue, with the median home of a new home at roughly $460,000 and 70% of U.S. households unable to afford a $400,000 home. Tight inventory continues to push up prices for existing homes — which have surpassed the cost of new homes as home builders adapt to affordability challenges by building on smaller lots, constructing smaller homes and offering incentives. Even with these adaptations, though, regulations tie in heavily to the cost of new homes and account for nearly 24% of the average final new home price. Permitting and building codes play a role in these costs, as does financing and interest rates.