Home Costs Could Drop 30% With Innovative New Construction Methods, JPMorganChase Says

Modular construction and other off-site building techniques could reduce the cost of constructing new homes by 20% to 30%, according to a new analysis from the JPMorganChase PolicyCenter. These methods, which include panelized and volumetric construction, could also decrease building timelines by 30% to 50%, potentially saving up to two months on construction time. Since construction expenses represent nearly two-thirds of a new home's total cost, these reductions could significantly impact affordability in a challenging housing market. Olivia Barrow Strauss, vice president of Housing Policy at JPMorganChase, stated that the PolicyCenter is examining state and local policies that can lower housing construction cost drivers. JPMorganChase has previously committed approximately $52 billion in debt and equity financing for affordable housing and an additional $498 million in philanthropic capital, which has helped preserve 435,000 affordable housing units. Despite the potential benefits, only 5% of new U.S. construction in 2024 utilized modular techniques, although this sector is experiencing growth exceeding the overall construction industry.