How Much Does It Cost To Build A House?

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Most people in their homeownership journey debate between buying a house versus building their own home. You can custom design your home from the floor plan to the number of rooms and layout. If you have a lot of detailed specifications and requirements along with the average home price rising, it might be in your best interest to consider building your own home!

However, building your own home is not cheap, the average cost of building a house can be anywhere from $200,000 to $450,000. There are several factors involved in determining the cost of building a house, for example, square footage, service/labor fee, materials cost, real estate trends, and location, etc. So how much does it cost to build a house?

Break-down of home building costs:
#ItemCosts
1Land$5,000 - $150,000
2Site Work$2,000 - $6,000
3Floor Plan$2,000 - $5,000
4Foundation$5,000 - $25,000
5Framing$20,000 - $50,000
6Exterior$30,000 - $55,000
7Systems Installation$30,000 - $75,000
8Interiors$50,000 - $150,000
9Additional Costs$2,000 - $10,000
Land: $5,000 - $150,000

One of the first steps is to find a plot of land that can best fit your new home! The price can depend on several factors such as the size of the land and the location, therefore, there is a wide range and can be more specific to your budget. It is best advised to use a real estate agent who can help you find the perfect plot for the right price. They can help negotiate the price and ensure the plot is not damaged or sub-standard.

Site Work: $2,000 - $6,000

Once the plot of land has been purchased it has to be prepared for construction. Sitework can include getting building permits, clearing of structures, and inspections. If the land already has access to utility lines that will save some cost, otherwise, the cost of adding lines can become expensive depending on how far the utilities are to the land. The most expensive cost that can result is the inspection of water and sewage facilities which is essential for a home. If structures are already present on the land, the cost of clearing can increase. The government also charges a fee, known as the impact fee, which is the maintenance cost of parks and surrounding public amenities.

Floor Plan: $2,000 - $5,000

Now you can get creative in your home design, with the layout of the rooms, bathrooms, kitchen, etc. If the plan is extremely complicated, it is essential that you hire an architect who can plan out the entire house based on your needs and requirements. An architect will cost around $5,000. If you know exactly what you want, you can hire a draftsperson for $1,700. It is crucial that you are clear on what you want and the individual drawing up the plans is clear because it is extremely expensive to change the plans midway.

Foundation: $5,000 - $25,000

Foundation is when the real construction begins! This is when the builders break ground on your new home. It requires heavy machinery, manpower, and expertise to ensure the foundation of the home is secure.

There are three different types of foundation that can be made – slab, crawl, and basement. All three have different levels of work and costs. Slab is the cheapest, and as the name suggests, the house rests on a concrete slab. Crawl space involves lifting the home high enough so that there is enough space to crawl underneath. Basement involves creating a full room underneath the house which is the costliest. Slabs can cost $5,000 and fully finished basements can go up to $50,000.

Framing: $20,000 - $50,000

This is the process of building the outer structure of the house and it is one of the most important expensive aspects of the home building process. It involves the use of a lot of wood, concrete, and steel to make the structure. The building of the triangular structure of the roof can add close to $4,000 to your total costs. Following the initial build, the whole house goes through a sheathing process where boards are to cover the frame and roof. If you decide to use steel to make the structure stronger, this can also increase costs.

Exterior: $30,000 - $55,000

This is an expensive item as it involves covering the periphery of the home which requires a substantial amount of material. The exterior also supports the roof of the home and protects the home in adverse weather conditions. Other items like doorways, windows, and a garage are also built as part of the exterior of the home. It can get expensive depending on the size and material used.

Systems Installation: $30,000 - $75,000

These systems include the HVAC system ($2,000 - $15,000), plumbing throughout the house ($1,500 - $20,000), and electricity ($10,000 - $30,000). This is an important and intricate task and therefore, should be done correctly and by contractors with the risk expertise. Any mistakes here can lead to large costs in the future as some of these system’s components will not be easily accessible.

Interiors - $50,000 - $150,000

The interiors of the house are the most expensive step of the process so get ready to spend a major portion of your budget! It is also catered to your needs and wants; do you want marble floors? Designer fittings? Modern technology? There is a list of basic expenses:

  1. Cabinets and counters: $15,000
  2. Doors and glass panels: $10,000
  3. Drywall: $10,000
  4. Flooring: $5,000 - $10,000
  5. Painting: $2,000 - $7,000
  6. Insulation: $5,000
  7. Appliances: $5,000
  8. Plumbing fixtures: $3,000
  9. Lighting: $3,000
  10. Fireplace: $2,000
Additional Costs: $2,000 - $10,000

There are a few additional expenses such as landscaping ($6,000), driveway ($5,000), and if you want a patio or deck ($3,000).

Factors Affecting the Cost of Building a Home

There are 3 main factors that change the cost of building your home dramatically:

Factors Affecting Cost of Building a House
  1. Location: The decision to build your new home in one region vs another will play a very large role in the total costs of building a home. The most expensive region to build a home is in the west and the southernmost areas of the country. Each city, state, and region also has its own land rules and regulations which must be followed.
  2. Region$ per Square Feet
    Northeast$155
    South$110
    Midwest$130
    West$160
    Nation$125
  3. Design Vs Developed: If you choose to design your own home from scratch such as the floor plan and layout, it will be more expensive than a developed version. In developed houses, the contractors create a variety of homes with different layouts allowing you to choose the one that best favors your needs. You give up some flexibility for reduced costs.
  4. Personal Taste & Budget: Once the location and type of home build are determined, the next factor is personal tastes and budget. This factor is completely based on you and your budget, you can choose to spend more on fittings, a finished basement, and an extra room, or you can also choose to save cash and get a standard fitting and an unfinished basement. This is solely based on how you want to design the home and what your budget allows you to spend.

Process of Building a House

Now that you are aware of all the costs involved and the factors that will impact the entire project, what exactly is the process of building a home?

  1. Needs & Requirements: This is an important step, you need to determine what exactly it is that you are looking for, the style of the home, layout, and type. Building a house can be an expensive and time-consuming process so it is essential to know exactly what you need. The choice between cost, time, and flexibility will also play a role. If you want to save funds, you can choose a developed option where you have less flexibility. The size of the home will also impact costs.
  2. Budget Planning: Create a master budget using estimates for costs that you do not know and for all the proposed expenses. This will help ensure you do not spend beyond your savings and planned expenses. Be sure to keep some cushion as costs are likely to be higher than estimates.
  3. Purchase the Land: Find the best vacant plot of land in the location you are looking to settle down for the future. Ensure it meets your needs like nearby schools, amenities, and public transport, etc.
  4. Hire Professionals: If it’s a home that you will design from the layout to the exterior, it will be essential to hire a general contractor who can manage all the other entities that will be involved. You will also need an architect or draftsperson to help you with the plans or at least review them. Make sure you pick good businesses and individuals as poor contractors can result in additional costs in the future, exceeding the savings from hiring them in the first place.
  5. Develop Plans: If you choose to purchase a developed home, there will be less planning involved, however, if it’s a designed home then you will need to spend time with the architect to help plan and verify your ideas.
  6. Organize Paperwork: You will need several permits to undergo this major project, along with several inspections.
  7. Purchase Insurance: If anything goes wrong during the project, you will be financially secure.
  8. Construction: Several contractors will be involved in the success of building your new home. It can take 3 to 6 months to complete your home depending on weather, quality of service, and regulations.
  9. New Home: The new home will be ready for a final inspection and it will be ready for you!

Can you afford to build a house?

Building your own home is an important and costly project, the biggest factor to consider is the cost of building the home. Apart from the costs, you need to take the time and effort out to ensure everything is done accurately and to your needs.

An easy check is to see if you can afford to purchase a house by using our home affordability calculator to determine the range which you can afford. Although purchasing a home and building a home is very different in terms of costs, it can provide a range that you can afford to spend on building a home. It is essential to do research on the housing market in your area to see whether it is better to buy or build. If you have the time to spare and want to live in a home that you designed and created, it will be worth the costs.

There are several construction loans available to finance this type of project. Once the construction is completed the loan can be converted into a conventional mortgage.

Any calculators or content on this page is provided for general information purposes only. Casaplorer does not guarantee the accuracy of information shown and is not responsible for any consequences of its use.