A 31% rise in Baton Rouge home prices since the pandemic was reported at a Wednesday afternoon presentation to the Home Builders Association of Greater Baton Rouge. Danushka Nanayakkara-Skillington, assistant vice president of forecasting and analysis for the National Association of Home Builders, also discussed regulatory costs as a national affordability concern; the figures available do not establish how much those costs contributed to Baton Rouge’s price increase.
Nanayakkara-Skillington said prices in Baton Rouge are 31% higher than during the pandemic, a figure first reported by The Advocate. Covid-era mortgage rates sat in the 2% to 3% range, unlike today’s market. The $132,000 regulatory-cost estimate cited in that report is a national average for new-home construction, not a Baton Rouge-specific calculation.
What the Baton Rouge Price Index Measures
The Federal Housing Finance Agency maintains a quarterly, not-seasonally-adjusted all-transactions house-price index for the Baton Rouge metropolitan area, according to FRED, the Federal Reserve Bank of St. Louis. The index was 301.94 in the second quarter of 2026, with 1995 Q1 set at 100; it is not a median sale-price measure. The available figure does not include the 2019 index reading needed to calculate a change over that period, so it cannot confirm or directly compare with the reported 31% increase.
Where the $132,000 Actually Goes
Nanayakkara-Skillington cited building code changes costing roughly $40,000 per new home, builder fees after a lot purchase running about $20,000, and zoning approval applications costing about $7,000. She described regulatory charges as a major obstacle to housing affordability nationally; the figures she presented are components of the broader national estimate, not local cost measurements.
A national NAHB study released in June backs up the scale of that jump: the group estimates regulatory costs for the average new home rose from $93,870 in 2021 to $131,734 in 2026 — an increase of more than 40% in about five years, according to a press release from the National Association of Home Builders. That study puts the national figure at $131,734, or 26.4% of the average $499,500 sales price as of January 2026, with $84,939 tied to regulation during construction and $46,795 tied to land development. Over that same five-year stretch, the group says, U.S. disposable income rose just 18.3% — meaning regulatory costs climbed more than twice as fast as what people actually take home.
A National Housing Shortfall
The regulatory burden is landing on top of a housing market that's already short on inventory. Nanayakkara-Skillington pointed to a 1.5 million housing unit deficit nationwide, which she said needs to be remedied by building more than 1.1 million homes each year. Instead, the industry is headed the other direction: NAHB expects single-family home building to fall by 4% by the end of the year and does not forecast an increase over the next two years, per the same report.
Labor is part of the problem too. Residential construction lost 50,000 workers in the past year while non-residential construction added 100,000, NAHB data shows, according to the Baton Rouge outlet's reporting. Mortgage rates rose above 7% last month, though Nanayakkara-Skillington said she expects them to eventually settle around 6%. Still, the economist told WBRZ that “the single-family market is struggling, but it is not a unique story” — a strain being felt in metro areas across the country, not just in Baton Rouge.
Local Builders See Reasons for Optimism
Despite the headwinds, there are signs of local resilience. Louisiana single-family permits are up statewide, Nanayakkara-Skillington noted to WBRZ, and both Louisiana and East Baton Rouge Parish have seen population growth upticks. Waning housing supply is coupled with fair demand, especially from millennials, while struggles in the single-family market have fueled activity in the townhouse and multifamily sectors. Residential remodeling is set to be the best-performing housing sector, as more homeowners choose to age in place or upgrade rather than move.
Scott Bardwell, owner of Bardwell Homes, a Baton Rouge custom homebuilder, said demand for houses has been moderate with no major swings, and that recent sales have mostly come from people moving to town or going through major life events such as a death or divorce. He's optimistic about the local market because of population growth and job opportunities, noting that Baton Rouge has jobs, is growing, has an aging housing stock, and people still want new houses. Bardwell also foresees fewer builders in the future as the industry consolidates and baby boomers retire. Separately, a national immigration crackdown has affected the home-building labor force.
Matt Holmes, general manager of Holmes Building Materials, offered a more cautious read on current supply. He said lumber costs haven't made a huge impact on home-building costs, but that there seems to be too much inventory for spec homes and similarly priced houses right now. Holmes said local population growth is encouraging, but housing inventory still needs to grow to meet it — a balance that, for now, remains out of reach for many Baton Rouge buyers facing both high regulatory costs and a shrinking pipeline of new single-family construction.
