ChatGPT Estimates 2025 Home Building Costs Amid Housing Supply Gap

What's Happening?

A recent inquiry into the cost of building a house in 2025, using ChatGPT, has highlighted the financial considerations for potential homebuilders. The analysis comes in the context of a significant housing supply gap in the U.S., which stood at 3.8 million in 2024. Despite new-home construction outpacing household formations for the first time since 2016, the backlog is expected to take 7.5 years to resolve. ChatGPT provided a detailed cost breakdown for constructing a standard three-bedroom, two-bathroom home in Myrtle Beach, South Carolina. The estimated costs range from $346,000 to $1.08 million, depending on the quality of finishes and other factors. The analysis also considered the impact of economic conditions, such as inflation and tariffs, on construction costs.

Why It's Important?

The findings underscore the ongoing challenges in the U.S. housing market, where affordability remains a critical issue. With only 28% of homes on the market in July 2025 priced within reach of median-income households, building a home could be a viable alternative for some. However, the economic conditions, including tariffs and inflation, add complexity to the decision-making process. The insights from ChatGPT provide potential homebuilders with a clearer understanding of the financial landscape, helping them weigh the benefits of building versus buying. This information is crucial for stakeholders in the real estate and construction industries, as well as policymakers addressing housing affordability.

What's Next?

Prospective homebuilders are advised to consider waiting for potential changes in trade imbalances and interest rates, which could affect construction costs. Real estate experts suggest that those set on building a new home might benefit from delaying their plans by six months to observe economic trends. Meanwhile, those eager to move into a home may find better opportunities in the existing housing market. The situation calls for careful planning and consultation with real estate professionals to navigate the evolving market conditions effectively.