How Much Does It Cost To Build a House?
In the current housing market, you may be a little shell-shocked at the sale price when looking to buy a house. If you are going to truly invest in where you live, you may want to consider building a house instead. This way you can customize your home to your needs, your family size and the fixtures and features you want to include.
Read: 3 Things You Must Do When Your Savings Reach $50,000
Often when you think of building a house from scratch, you assume it will cost much more. Though it is a good chunk of money upfront, you don’t have to worry about the maintenance, repairs or upkeep of an older home.
There is also an added benefit. When it comes time to sell your home, it will be newer on the market, which can get you a higher selling price to help further your investment.
How Much Does It Cost To Build A House in 2023?
Nationally on average, it can take six months to a year to build a house, with the average cost being around $114,256 to $488,983. But that cost isn’t the same for all new houses or single-family homes built across the U.S.
Instead, factors such as location, square footage, the materials and products you select, as well as local labor costs, all influence the total construction cost of your new home. Plus, builders are seeing the prices of lumber and material go up, which they pass on to the consumer.
8 Home Building Cost Estimates
While it’s impossible to give a nice, round figure on what the typical costs for you to build a new home will be, here’s a broad overview. This includes some information from home builders and developers to help you get a rough idea. The following are some of the main home-building costs to factor into your budget:
Land or lot choice
Permits and home design
Costs per square foot
Lumber prices
Interior finishes
Exterior finishes
Plumbing, electrical and HVAC
Labor costs
1. Land or Lot Choice: $3,000 to $150,000
Before you can start building, you first have to secure a place to build. Depending on the location you choose, this can greatly affect the overall cost, and is often what drives up the price of real estate. Not to mention the the expense of clearing the land to prep it for your building foundation.
If your desired location is near a good school district or closer to a major city, the price will probably go up as opposed to more rural areas. There is also the ease of build to consider, as the flatter and easier your land is to build upon, the less it will cost you in prepping and labor. Prepping a lot can cost around $1,300 to $5,100.
Lots vary greatly in price once you know all the outlying factors. It is estimated that they can range anywhere from $3,000 to $150,000. The lower end of the price range would be for an underdeveloped lot in a rural area that may need clearing.
In housing developments, you can expect to spend between $50,000 to $100,000. Lot pricing varies according to size, location and whether sewer, water and electricity are already present or need to be brought in.
2. Permits and Home Design: $500 to $20,000
Home design services and permits will comprise 10% to 25% of new home construction costs. House plans can cost $500 to $20,000, depending on how basic or complicated your designs are. If you need the services of design professionals, you can expect to pay between $50-$250 per hour. Permit costs will vary depending on location, but it is estimated on average to be roughly $1,200 to $2,000.
3. Cost Per Square Foot: $120 to $500
It shouldn’t surprise you that the more you build, the more expensive it will be. Depending on the materials, the price will range greatly anywhere from $120 per square foot to $400 per square foot. This can increase for custom builds, as the estimate jumps to about $200 to $500 per square foot.
Building a home is more expensive now, but that’s not to say you won’t get value for your money. While you might have been able to build your dream home for a certain amount per square foot a year or so ago, it will likely cost more now. Here are some sample breakdowns based on square footage:
Square Feet | Price Range Average |
|---|---|
800 | $80,000-$160,000 |
1,000 | $100,000 -$200,000 |
1,200 | $120,000-$240,000 |
1,500 | $150,000-$300,000 |
2,000 | $200,000-$400,000 |
2,500 | $250,000-$500,000 |
3,000 sq. ft. | $300,000-$600,000 |
4. Lumber Prices: $25,000 to $65,000
You’ll typically spend between $25,000 and $65,000 on lumber when building a new home, but there is always potential for lumber prices to rise, given varying supply and demand effects such as infestation, distribution delays or wildfires. Keep in mind that external factors could greatly increase how much you will pay for lumber and other materials.
5. Interior Finishes: $50,000 to $100,000
Typically, interior finishes comprise less of your overall construction costs than exterior ones, unless you opt for high-end or customized finishes that cost much more. You’ll probably spend about 25% to 33% of your budget on interior finishes. However, as you will be picking the overall design and materials you wish to use, you can opt for swaps to drive down the cost, as long it doesn’t affect the durability or safety of your home foundation.
Below are some examples of what it may cost for specific interior finishes:
Appliance price: $3,000 to $15,000
Countertop installation cost: $2,000 to $4,350
Custom cabinet price: $2,000-$30,000
Drywall installation price: $5,000 to $30,000
Fireplace installation fee: $1,000 to $10,000
Flooring installation price: $10,000 to $35,000
Interior door installation cost: $5,000 to $20,000
Interior painting price: $4,000 to $11,000
Lighting fixture cost: $2,000 to $12,000
6. Exterior Finishes: $40,000 to $60,000
Exterior finishes account for things such as exterior walls, exterior paint, concrete, drainage, drywall, windows, roofing and doors. This will be a big chunk of your budget, as it is estimated to be around 60% of your total cost. Though this is one of the spicier bites of your overall home-building costs, you can find inexpensive ways to achieve the look you want if the estimate is too astronomical.
Here are some estimates for some of the staple exterior finishes:
Painting a home exterior cost: $1,800 to $4,400
Roofing installation cost: $5,700 to $12,000
Window installation cost: $3,000 to $9,600
7. Plumbing, Electrical and HVAC Costs: $30,000 to $75,000
Overall, you can expect to pay between $30,000 and $75,000 to install plumbing, electrical and HVAC systems in your new home. These are fundamental to any home, so you’ll want to make sure you use the right materials and find the right people to install them for you. You really don’t want to mess around with faulty plumbing or electrical outlets.
Electrical wiring cost: $20,000 to $30,000
HVAC: $1,500 to $13,000
Rough-in plumbing costs: $7,500 to $15,000
Solar panels cost: $18,000 to $35,000
8. Labor Costs: 30% to 50% of Your Project Costs
One of the biggest variants in your house-building budget will be labor costs. Between technicians and independent contractors, there are so many moving parts. You can try to aim for 30% of your budget going to labor, but plan for at least 40% to 50% so you aren’t left in a financial lurch.
Here are some sample estimates of what to look for when gauging labor costs:
Architects cost: $125 to $250 per hour
Construction manager cost: 5% to 15% of the total project cost
Electrician rate: $50 to $100 per hour
General contractor cost: 10% to 20% of the total project cost
House framer rate: $7 to $16 per square foot
Interior designer rate: $50 to $200 per hour
Landscape architect fee: $70 to $150 per hour
Plumber cost: $45 to $200 per hour
Structural engineers cost: $100 to $200 per hour
Final Take To GO: Is It Worth It to Build Your Own House?
The general consensus among building experts and the National Association of Home Builders is that you should leave room in your building budget beyond what you think you’ll actually need. One of the biggest mistakes you can make is not having enough wiggle room for unexpected costs, between the labor or materials.
As with any large project, keep in mind that timelines and price estimates are subject to change, so try your best to be flexible and pivot where you can.
Cynthia Measom contributed to the reporting for this article.
This article originally appeared on GOBankingRates.com: How Much Does It Cost To Build a House?
