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Study finds building code updates did not lift home prices

Researchers analyzed 2.7 million sales across 26 states from 2011 to 2022 and found no sustained link between residential code adoption and higher prices.

Reported · Written up by our desk · Residential

HousingWire reports that researchers at the University of Alabama examined 2.7 million home sales across 26 states from 2011 to 2022 to test whether residential code adoption increases housing costs and prices.

The study reviewed 45 adoptions of the International Residential Code and found no sustained pattern of higher prices after jurisdictions adopted modern residential building codes, challenging the argument that stronger codes automatically translate into more expensive homes.

While the authors acknowledge construction costs can rise, they said the study does not support a systematic pricing effect from code adoption and implementation. Instead, they point to other drivers of home prices, including land and labor costs, mortgage interest rates, neighborhood characteristics, home size and age, local market conditions, and supply and demand.

The researchers also observed that among homes up to ten years old, price decreases occurred more often than price increases following code adoption, and they argue affordability should be viewed through added durability and disaster loss reduction rather than purchase price alone.

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