The cost of building a new home in the US could rise by 3% by the end of 2025, driven by tariff pressures, according to a new report from Bank of America. The bank reports that despite price growth slowing since its pandemic-era peak, new home prices remain elevated relative to income. Average prices jumped from $371,100 in Q2 2020 to $525,100 in Q4 2022. …While the average size of US homes has declined by 12% over the last decade, the cost of building materials has continued to climb. “We estimate the value of content in an average US new single-family home was $102k in 2024,” the report said. “We estimate the bill of materials to build a house has increased at a 3.6% CAGR from $23K in 1982, consistently outpacing overall inflation over the last 40+ years.” …One of the key drivers of rising construction costs is tariffs.