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How Much Does it Cost to Build a House?

How Much Does it Cost to Build a House?

Over the last few years the housing market has exploded. With historically low mortgage rates, and demand through the roof, finding a house has become harder than ever. As people look towards alternatives, the option of building a house is at the forefront for many.

Building your own house provides a degree of flexibility that is not possible simply buying a home, whether it's brand new or existing. Yet the intricacies and regulations required to build a house render the whole process complex, and that's without even mentioning the price.

Key Takeaways

  1. The average building cost of a single-family home is $296,652 in the U.S.
  2. Land costs cover not just the sale of the property, but also clearing and leveling
  3. Furnishing the house, adding a driveway, and extensive landscaping are highly variable costs that come after building the home

The Average Cost of Building a House

Based on data from a 2020 study by the National Association of Home Builders (NAHB), the average sale price of a single-family home in the United States was $485,128. In contrast, this figure is exceedingly expensive compared to building your own single-family home. The average building cost of a single-family house is $296,652, per the same NAHB study. While the nearly $200,000 difference between the two figures seem to indicate that building a house is an extremely attractive option, to get the full picture one needs to take a look at a number of factors.

Building a house comes with a number of benefits. By building your own house, you acquire a house perfectly styled to your preferences, filled with completely new material, and fantastic potential resale value. However, prices when building a house can have huge variances due to the customizability, as every house allows for something different.

As you take a deeper dive into the permutations and details regarding the cost of building a house, you will begin to understand the costs involved in building your house, and also how much you can choose to spend. The tables below give an idea of the wide range of options to consider, and reasons behind figures displayed in the tables.

Cost To Build per Bedroom

Number of BedroomsAverage Cost
1 Bedroom House$80,000 - $400,000
2 Bedroom House$100,000 - $480,000
3 Bedroom House$150,000 - $800,000
4 Bedroom House$200,000 - $1,000,000

Average Cost to Build by Region (per square foot)

RegionAverage Cost
South$122.00
Midwest$140.00
West$142.00
Northeast$186.00

Average Cost to Build by Square Footage

Square feetAverage Cost
800 square feet$80,000 - $160,000
900 square feet$90,000 - $180,000
1,000 square feet$100,000 - $200,000
1,200 square feet$120,000 - $240,000
1,500 square feet$150,000 - $300,000
1,600 square feet$160,000 - $320,000
1,800 square feet$180,000 - $360,000
2,000 square feet$200,000 - $400,000
2,500 square feet$250,000 - $500,000
2,700 square feet$270,000 - $540,000
3,000 square feet$300,000 - $600,000
4,000 square feet$400,000 - $800,000
5,000 square feet$500,000 - $1,000,000

Individual Costs of Building a House

The main reasons behind the wide range of costs when building a house are due to the factors below. The quality of materials, along with any unforeseen obstacles impact the amount of money you will spend.

Land Costs

No housing project can start without land, but the process to acquire land ready for building is not as straightforward as it seems.

The type of land you seek to buy mainly depends on what type of house you are looking to build, and specifically the area you are seeking to build in. House types, such as Spec Homes and Tract Homes have had much of the land costs taken care of, with the buyer having fewer steps of the process to deal with during construction. However, when building a custom home from the ground up, you have the complete freedom towards deciding on all aspects of the land you want to build your house on.

The two distinct types of land when building a custom home are related to location: rural and urban land. In urban areas, usually the land bought is already connected to utilities, such as the water supply, sewers, electricity, and phone/internet. However land in rural areas lacks these features, making building on it significantly more time and cost intensive as you have to arrange for the utilities yourself. Consequently, land in urban areas generally are much more expensive than rural land.

Once you have acquired your plot, there are two further steps left in order to begin construction

Clearing the Property

  • A professional land clearing team needs to be hired in order to remove trees, tree stumps, vegetation, etc. which is required in order to proceed with construction and prevent any further problems in the future

Leveling

  • You will also need to hire the services of a team to level the plot where the house is intended to be built
  • Leveling is essential in order to planning out construction construction
  • Leveling can be designated by the home builders to fit any structural or design needs

Soft Costs

While the land for your planned home may have been acquired, there still are a few steps left to complete before you are able to begin construction.

Permits

  • There are a number of permits needed before you can start home construction, and it also depends on the type of structure of your planned house
  • A building permit is an absolute requirement, as it is a signal to local authorities that the land and plans are up to code and are safe to start construction
  • There are several sub-trade permits that also can/need to be obtained when preparing for construction:
    • An electrical permit is required when attempting to install any electrical work in the house; and they pertain to everything from light fixtures to electrical wiring
    • A plumbing permit is needed in order to properly install anything related to plumbing ranging from piping to installation of a water heater
    • An HVAC permit is necessary in order to install a heating and cooling system
      • A basement permit may be necessary if you plan to include a basement within your house
      • There are also special permit needs, based upon the local jurisdiction's requirements, such as racking permits in California for earthquake safety

Impact Fee

  • An impact fee is a situational cost, but is likely to be incorporated when building your home
  • Impact fees are implemented as a payment for the public services around your property, and reduce the financial impact of these services
  • The implementation of impact fees largely depend on the area in which you plan to build your property

Water and Sewer Inspection

  • A water and sewer inspection is needed before you can finalize plans for your potential home
  • These inspections are needed to make sure your home will be able to have access to water supply and drainage systems
  • Further inspections can also be completed to make sure the lines connecting to your home are completely operational and the infrastructure has no potential for incident

Architecture and Engineering

The use of professional engineers and architects are essential to building a safe and comfortable house. This should be the first step in the process - sometimes even before you buy land - so that you don't end up with a house incompatible with the land bought.

A competent architect will be able to understand their clients needs and provide design most suitable for their clients. It includes interior/exterior of the house, and also choices of materials and design that fit within the available budget. Similarly, the engineer takes the architect's designs and provides technical input to ensure structural integrity. Though these professional services do not come cheap, they are the best investment anyone can make if they want to have a custom home. Typically, architects' fees can range from 8% to 15% of the construction budget, though some may work on a fixed fee basis. Additionally, engineers fee can range from 1%-20% of the construction budget depending upon the cost and complexity of the design.

These wide ranges in prices exist for the differences in quality between the price ranges, but also the size and design of the house being constructed.

Average Cost by House Type

House TypeAverage Cost
Timber-Framed$200 - $250
Steel-Framed$10 - $15 per square foot
Brick$10 - $15 per square foot
Concrete$204,000 - $416,000
Guesthouse$45,000 - $100,000+
Modular/Prefabricated Homes$180,000 - $360,000

Hard Costs

After all the previous steps are completed, you can finally begin constructing your house. Yet there are a huge number of processes that need to be completed before you can move in.

Foundation

  • The first step you will have to undergo when building a house is laying the foundation, the below ground support necessary for preventing your house from sinking
  • The type of foundation used depends on both budget and preference
    • There are 5 main foundation types
      • Basement = creates a basement within the house which causes it to be the most expensive foundation type; has environmental risks
      • Crawlspace = consists of foundation propped up by concrete stems; allows for easier access to utilities and protection from the environment
      • Concrete Slab = one slab of concrete is poured to lay as foundation for the entirety of the house; renders it quick and cheap
      • Wood = built of non-decaying wood which is easy to install; cheaper option than concrete
      • Pier and Beam = best for use on homes in which soil is shifting or eroding; ideally for beach homes

Framing

  • Framing is a large portion of your house cost as it requires heavy amounts of labor and material
  • The frame acts as support for the house, ensuring your floors, walls, and ceilings always stay in place
  • Price is affected by both size and complexity of home, as both factors can increase labor and material costs

Average Cost by Construction Type

Construction TypeAverage Cost
Joisted or Load Bearing Masonry$3 - $35 per square foot
Steel Frame$9.50 - $11 per square foot
Concrete Frame$4.34 - $7.73 per square foot
Wood Frame$7 - $16 per square foot

Installation of the Interior and the Exterior

Having completed all the steps above, you are left with the skeleton of the house. The installation of the following are what completely personalize your house, while also making it livable.

Average Price of Labor and Material Costs

Labor and MaterialAverage Cost
Framing$40,612
General Metal$954
Exterior Wall$19,319
Roofing$9,954
Windows and Doors$11,747
Plumbing$14,745
Electrical$13,798
HVAC$14,111
Insulation$5,184
Drywall$10,634
Interior Trims$10,605
Painting$8,254
Lighting$3,437
Cabinets/Countertops$13,540
Appliances$4,710
Flooring$11,998
Plumbing Fixtures$4,108
Landscaping$6,506
Clean-Up$2,988
Excavation and Foundation$33,551

HVAC

  • HVAC (heating, ventilation, and air conditioning) allows for temperature control throughout a house and the movement of either cold or hot air
  • The price for the installation of an HVAC system depends on both the size and complexity of the house along with the quality of the system itself

Plumbing

  • Installing plumbing in your house will connect appliances to the water supply or sewer lines, if needed
  • The price of plumbing depends on both the size and length of pipes required, along with the quality of the pipes

Electrical

  • Electrical wiring is installed in order to connect your house to the power grid
  • The price is based on the complexity of your floor plan, the quality of the wiring material, and the specific requirements regarding outlets and switches

Amenities

Within your house, you have freedom when it comes to the appliances, furniture, and any fixtures you would like to include. None of these have any permit requirements, and allow for the buyer to have any of their choices. This allows for much of the freedom within the house, but also allows for the buyer to choose their costs towards this area.

Roofing and Siding

  • Both roofing and siding are needed to keep the elements out of your house and ensure your house is durable
  • Cost depends mainly on both the material used and the quantity of the material needed
MaterialAverage Cost
Concrete$1,000 – $10,000
Drywall$10 per sheet
Flooring$1 – $5 per square foot
Siding$2 – $15 per square foot
Insulation$0.10 – $1 per square foot
Roofing$1,000 – $3,000
Lumber$25,000 - $65,000

Final Details

The final steps left in completion of a house are largely up to the builders. There are an infinite amount of finishing touches that someone can apply when completing the building of a house, but there are a few common ones that make a significant contribution to the final cost. For example, the additions of a driveway can cost greater than 6,000 dollars, and the addition of fencing around a yard can cost greater than 2,000 dollars. These are expensive additions that may seem essential to some, but useless to others. Beyond just creating these extensions to your house, extra permits may be required by your local government, drastically upping the cost. In total adding a few extra amenities may increase the final cost of your home by nearly 20,000, and as with much of home building, the potential for even more.

Bottom Line

So, as you can see, there's a lot that goes into building a house. While there are many averages and statistics presented that can temper your expectations, the true cost for every project is unknown. Going into the process with a full knowledge of things you need to account for will help you avoid surprises during construction. Designing your custom home is supposed to give you comfort and satisfaction for years to come. Investing the effort up front will allow you to enjoy the fruits of your labor and value of investment for years to come.

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