How Much Does it Cost to Build a House?

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Are you thinking about building a new house? If you are, there are some associated costs with any new home build you should know about.  In addition, with so many hidden fees and unforeseen problems, how do you make sure you have enough money budgeted to build a new home? In this article you will learn not only about the costs to build a house but about some other critical elements that are just as important.


New Home Prices Are Ever Changing and Local

Way back in my contractor years, I worked with national builders like Pulte, Mungo, Rymark and even some high end custom home builders in Hinsdale, Illinois and in the Carolinas. I can remember pricing per square foot for a new home ranged $50 -$75 to build out a new home. Now those costs have in many cases more than doubled to $100 to $120 per square foot now. With the national average at $150 per square foot. This is for a very basic home and nothing fancy. Also keep in mind these prices may not represent your local area but are more like an average from the southeast and Midwest areas. Please consult with a local Realtor who can not only connect you with a local home builder but help you in a lot purchase find as well. I have made a local Realtor list below by city and state that I can recommend. An experienced local Realtor doesn't cost you money, but rather guides you in the right direction by saving you time, money and headaches. It pays to get with a local Realtor. Especially for your most valued asset in line.

As far as home prices on the basic if you choose vinyl siding and vinyl floors, carpet you can pay $110 a square foot for the basic new home build. If you go with hardwood floors, tile, solid surface counter top, custom cabinets and some kind of upgraded exterior finish like a fiber cement hardiplank, expect to pay $135 per square foot. Here is a general breakdown per foot.


Entry Level New Home Cost -  Expect to pay from $100-$120 cost per square foot.
Mid Level New Home Cost - Cost here which is average cost I would say is about $130-$150 cost per square foot.
High End New Home Cost - Prices can be from $150-$250 per square foot. Exterior finishes like a stone facade and brick on the outside. Brazilian cherry or a plank walnut, more crown molding, coffered ceilings and copper gutters. Depending on whether you use a home builder or not, it pays to research all material costs.


These are fixed cost when building a new home. Things that you simply can't adjust. These are costs for materials and labor. Square feet prices are just prices going up and in many areas labor is in short short supply. If you're building yourself and material shopping yourself, you can save 30 or 40 cents per stud. That pales in comparison to the amount of money you can save on your choices on counter tops and plumbing fixtures and electrical fixtures.  Most of what has been spent prior to the drywall is a fixed cost. There is very very little that you can do to reduce the costs of the building material in the bones of your house. It's going take a certain amount of concrete, a certain amount of lumber and a certain amount of labor to build a new house.Those things add up.


Three Main Elements to Consider in New Home Construction Costs

How much does it cost to build a house boils down to really three main areas. Design, Cost and Marketability. The Design is actually the most important to consider in my opinion when trying to figure out costs of building a new home. It is so closely related and if you get it wrong you will be stuck with a poorly designed house. Regardless if you are building a house for yourself or not, these three areas have got to be part of your calculation. Don't  just  look at the line items to build a house like an accountant.  You need to see the whole picture of a new house build.


1. Design

new house design cost

One of the rules of thumb when you start this is to get very clear in your mind one undeniable truth about building something. You will never recover if you commit yourself to bad design. Bad design means is if you put your house in the wrong spot. If the location is wrong. If the location on your lot is wrong. If the orientation relative to the solar exposure or your driveway location is off. The orientation of the windows in your house is wrong, then either you're not going to get a view or you're going to get a view that you hate.  I can't stress enough about bad design. If you get the design wrong, it'll always be wrong.


Design is something you can't recover from. Bad design in real estate lingo can also mean functionally obsolete. Here are some examples of bad design. Building a 5 bedroom home with 2 bathrooms is one example. Getting the elevation of your house wrong. If you get your house too low for example the water is going to drain the wrong way. Higher is generally better because water is what damages homes. I have personally done way too many water repair jobs myself They are bad news.


What about the size size of a house? You have to think carefully about the difference between what we want and what we can afford. Then consider the function. Function is one of the trickier aspects of design because if you haven't been professionally trained it's hard to anticipate how a house actually functions. What it'll actually be like living in the space.


Also, there are many energy efficient options available in today's market like upgraded insulation, concrete walls,  solar and much more. Be sure to check out local home shows, parade of homes or see a local Realtor and builder resource center to learn more. Maybe you want to build a custom designed green home and there the price per square foot can vary a lot also. Building your own home can be very rewarding, but consider all major systems and additional factors you may have not considered. Heating and cooling building designs to suit your area you want to build in. This can either cost your or save you in the long run.


There are many home designs out there to suit your needs but affect costs in home building. Talk with a custom home builder and they might help you oversee your costs of building as well as the pros and cons. So that's why at some point or another I always recommend you get input from a professional architect and builder.  A local Realtor will put you in contact with the local leading Architects and Home Builders. Be sure to consult with a structural engineer in some cases where you have a special lot which requires a unique foundation buildout


2. Cost

For any home builder cost is a big driver. Whether you're doing this yourself or using a general contractor to handle all of the aspects of the process, dollars are the thing that we tend to think about and talk about first and most. First it's not just square footage. In other words floor space that adds to the total costs, it's cubic feet enclosing the structure that add the true cost of a new home. For example if you are going to have  2-story high spacious rooms with grand foyers and entries. This adds a big chunk to the total costs of a new home. Any time you add cubic footage volume inside a house it is directly related to total costs. Simply put taller walls, taller roofs are more material costs.

But did you know a single story house is more expensive per square foot than a two-story house? Yes it's true,  because you are actually building half exactly half of the foundation and half of the roof per square foot.

A one two-story foundation gets you twice as many square feet of living space. But it is less expensive to build two-story generally than single-story in terms of square feet.


Only about 20% of the cost of a house is in the framing, the structure, the walls,sheathing and the joists. So when you're looking to save money on a house framing  this is not the big target but can be manageable.

One thing that can kind of skew that framing number is the roof. There are expensive roofs and there are inexpensive roofs. The expensive roofs are steep.  Steep roofs are multi angled,  they're multi-pitch, have dormers and hips. They have all manner of decorations and valleys. They're beautiful but at the same time they're expensive to frame. If you can simplify your roof design you're going to reduce your construction costs least in that 20% or so of the construction costs that are involved in the framing.


When the Drywall is Hung You are Far from Finished

Most people think when the drywall is up we're almost done and can move in. In reality, when the drywall is hung you're about 50% of the way home. Don't let your expectations get out of control when you happen to get to that point. But once the drywall is taped and textured, then your design choices can have another huge impact on final costs.


The aesthetic surfaces cost you have to consider now. By surfaces I mean the moldings, the floor coverings, the countertops, cabinets, light fixtures, plumbing fixtures, tile, backsplash, hardware on the doors, the doors themselves and much more. These are places that costs can really grow or can be pulled back. 

The square footage, the size of your house is a more valuable commodity than the surfaces that you install. You can always upgrade surfaces and if you live there over about 10 years you will. Fancier fixtures can be installed. Chandeliers can be changed out when new ones go on sale. You can upgrade the flooring too. You can do things over time but you're not going to change the size of the footprint of that house without a serious outlay of cash.


So if you have a budget that has to go a certain distance and you think that it is the size that you need for your growing family or maybe a home business or something, save the money on the surfaces, invest it in the space and then upgrade your environment as your economic circumstance changes through the years.


3. Marketability

marketability of new house build

This I can write on from first hand experience also.  So a close relative of mine happens to be a Doctor. But I can tell you being a Doctor does not foolproof you in a new home build when it comes to marketability. Marketability applies to you even if you're building the house that you're gonna raise your kids in or that you're gonna retire in or that you intend to be in for a long time. Eventually somebody, either you or those who inherit your property are going need to sell this so it is not wise to disregard this.


You see what happens is many people who go into building a new home or building a custom home for that manner do not consider the back end of getting into a new house. They get emotionally tied to making it so custom to their tastes and desires, they forget about the marketability of the house. What I mean here is when it comes time to sell. You need to equally thing when you build or buy a new construction home, you must ask yourself, can I market and sell this home too?


What happened to this Doctor was a true loss of time and money. She had built a custom home in a subdivision that simply was not only the biggest home but the most unique to suit her tastes. It took five years to sell and numerous price reductions and much money lost to learn this hard lesson.


 Land Preparation for Your New House

land preparation costs new home

The cost to prepare land for building a house is another figure to consider. There's a lot of different scenarios here. The  most common would be if you're going to be building on a lot in a fully improved subdivision. That means that there's sewer, water,gas and electric in the subdivision. You pretty much just have your building permits and you've got your connection fees. Connection fees for hooking up to the sewer and the water. You've got your costs for actually having the work done to hook up to the sewer and the water. So this is the excavator putting in laterals and the like. You've got your driveway and that about covers most everything that's needed to basically connect your home to a subdivision lot.

The approximate cost to prepare a lot for building a house in a fully improved subdivision is about $13,000-$20,000 on average and that includes all of the building permits, concrete driveway, the survey work, fencing around the job site, the sewer and water hookups. Aside from the actual lot cost and home building costs. The other scenario is if you're going to be building out a lot that has fully improved minus it doesn't have water. So there's a lot of neighborhoods that will have sewer but they don't have water run to it. So in that case you're going to take an add about $10,000 to $12,000 on top of the $13,000- $20,000 for a well. The well alone will cost on average $10,000. Then you are also going to have a reverse osmosis drinking water system that needs to go in, a water softener, possibly an iron filter depending on the strength of the the minerals in the water.

Scenario number three is building on raw land. So this is just you know we're building out a farm field in the woods somewhere where there's no sewer and with no water. There's gas and electric but it's way out at the road and you want to be you know 150 feet off of the road, well in that case I put an average of about $40,000 for those raw land improvement costs.

Every village or town or municipality have their own separate permitting costs. As a general rule of thumb if you're going to be building a house in a subdivision on an improved lot, just figure that the build cost is going to be about $24,000 more if you're building on a piece of raw farm land as opposed to a fully improved subdivision lot. Then if you compare building on a fully improved subdivision lot that doesn't have water compared to a fully proved subdivision lot with water, that build cost overall is going to be between much more.


Contingency Amount for New House Build

One line item for costs many people forget is something called a “contingency amount.” So when it comes to properly budgeting for a home building project, no matter what the size is, you must have a contingency price included in the estimate, and ultimately in the construction contract.

A contingency price, or sometimes referred to as a contingency allowance is a line item cost that represents a small percentage (usually 3-15%) of the total cost of the construction project. That money then is “set aside” for ALL unforeseen problems associated with the project.

So when it comes to protecting yourself, never sign a construction contract without a contingency price.

Other Fees in New Construction to Consider

If you're planning to build a home be prepared to face constant changes in rising costs of impact fees. Some areas of the country you will be surprised that there's even a labor shortage. Building may be your only option in what is turning into an affordable housing shortage, it's all about supply and demand. In some markets, there are not a lot of properties either resale or new construction available in the market and there are a number of buyers.

In general, it typically takes six to nine months to build a home. That's if you've purchased the land. Some area have only limited land which can drive the price of lots. For a 3,300 square foot home expect to pay around $6000 or more for such things as water sewer parks and recreation fees. For the same house you can expect to pay upwards of $4,000-$8000 for electrical connection fees. Then there are building permits which cost around $1700 for a 3,300 square foot home. Building permits costs vary from state to state. Don't forget the inspection costs as well.

Before you even start construction on a home with land and regulation costs you need to know it's a huge percentage of the home. That cost can be $20,000 alone.
So as you can see the average price of building a home can vary a lot. Cost estimates can also range depending on local materials and labor as well. There are home construction loans that offer help in the building costs too.

Thanks for reading how much does it cost to build a house. Don't forget the time frame time frame final cleanup on your dream home build.

Local Realtor list I can recommend below.

For the Charlotte, NC area I recommend Debe Maxwell, CRS 

For the Warner Robins, GA area I can recommend Anita Clark 

For the San Jose, California area I can recommend Kathleen Daniels 

For the Barrington, Illinois area I recommend Corinne Guest 

For the Franklin, Massachusetts area I recommend Barbara Todaro 

For the Tallahassee, Florida market I recommend Fred Griffin 


Re-Blogged 9 times:

Re-Blogged By Re-Blogged At
  1. Barbara Todaro 06/23/2018 05:26 AM
  2. Elizabeth Weintraub Sacramento Realtor Top 1% 06/23/2018 12:46 PM
  3. Gita Bantwal 06/29/2018 07:00 AM
  4. Kate McQueen 06/23/2018 04:14 PM
  5. Debe Maxwell, CRS 06/24/2018 09:20 PM
  6. Kathleen Daniels 06/25/2018 09:29 AM
  7. Jill Watts 06/25/2018 06:56 PM
  8. Erika Rogers 06/28/2018 09:20 AM
  9. Gabe Sanders 07/05/2018 11:00 PM
  10. Fred Griffin presently on Leave of Absence 09/22/2018 09:43 AM
Home Buying
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John Henry
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

Good info here Peter.  Costs to build as you say vary quite a bit from region to region.  Land costs in popular locations: mountain view, close in, ocean side, in areas squeezed for space -- tend to cost quite a bit more.  Then labor costs vary around the country depending on demand.  Sometimes you cannot get bids from contractors due to the pace of the market.  A hot market means everyone is building in a frenzy and available labor is scarce.  Materials costs tend to remain stable except when there are shortages of lumber or concrete for example.  For years Houston was touted as the place to build the biggest house for the least cost.  Primarily due to low labor costs.

Costs to build can vary within a state in fact.  Miami and Ft. Lauderdale have higher costs than Orlando or Pensacola.  A luxury home here starts at $250 and goes up. A very ornate period style home could start at $650/SF and go up to $2000/SF or more.  Some houses in San Francisco and Beverly Hills average higher than that.  Desirability of location is key.  Some neighborhoods have cache, others don't.

Environmental regulations and difficult zoning laws also ratchet up costs.  No doubt difficult to build lots add costs.  A house on the intracoastal here requires dozens of pile footings - extremely expensive.  Costs are higher on a steep lot build.

Building for resale is also an important issue.  One can build a dream house but if it has too many quirks about it (style, layout, typical for area, etc.) the seller cannot recover part of the original cost unless the market is very hot.  Building a high priced house in a mid price locale will make you the most expensive house in the neighborhood and may bring up the value of all the other houses but will drag your investment down.

More tips for designing the luxury house here:

Jun 24, 2018 05:11 AM #16
Ben DeHaven
Haven Realty & Investments - Winter Haven, FL
Proudly serving Winter Haven & Lakeland, Florida

Great post full of information here. Thanks for taking the time to put it together. 

Jun 24, 2018 07:21 AM #17
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Oh Peter,  What can I say other than when you write a post. You. Write. A. Post.  

Knocking the post out of the part and receiving record number reblogs. 

You live by example ... of what you teach.   Thank you!!

Jun 24, 2018 07:57 AM #18
Stephen Turner
Gemcraft Homes (TriCorner Realty) - York, PA

Thanks for the overview, it's a good post. Yet with so many variables that what makes new construction costs so varied. Too many agents and buyers look at the price per sq. ft. but don't take into account the different materials, finishes, and fixtures that affect that ultimate cost per sq ft.

Jun 24, 2018 10:11 AM #19
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, - Monroe, NY
The House Kat

This was an excellent overview of the process and costs of building a new home. Very interesting - I'm going to be bookmarking this for future reference and sharing.

Jun 24, 2018 11:29 AM #20
Debe Maxwell, CRS | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Another out-of-the-park post, Peter! New construction is a hot topic here - I just wish we had more land on which to build here.

I'm honored to have made your list of recommendations too! Thanks for a great article - I'm off to re-blog it!

Jun 24, 2018 09:05 PM #21
Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

This is an excellent article on the steps and costs of building a home Peter Mark . Well presented and thank you for the wealth of information and research that you put into it. 

Jun 25, 2018 10:27 AM #22
Jill Watts
Realty Pro, Inc. - Vancouver, WA
A Luxury Experience at Every Price Point!

Hi Peter Mark! Thank you for the most comprehensive article I have ever seen on the estimated costs to build a new home. My buyers and sellers in Clark County WA will appreciate such succinct information so they can begin their home building process with a good idea of what it might cost. 


Thank you for your knowledge and for sharing with us!! A true leader.

Jun 25, 2018 07:01 PM #23
Marie-Denise Kratsios
Daniel Gale Sotheby's International Realty - Huntington, NY
Where ever you are, that's where I'll be!

Great and informative article @petermarkseo. On Long Island, I understand the average costs for building a new home are $200 - $250/sq ft. Another big factor to consider for new construction costs on LI are what the property taxes will be. Taxes on new construction here are usually very high.

Jun 25, 2018 08:54 PM #24
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Let's not forget about fire hazards, distances to fire hydrants and fire stations and costs associated with fire hazard construction material. Finally, access to the Internet. Great post.

Jun 26, 2018 01:21 AM #26
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks to Debe Maxwell, CRS for her re-blog of your post I managed to see it.  I will be keeping this as a reference to show those with questions about building costs.  

Jun 27, 2018 05:23 AM #27
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent post.  I have a set of clients right now who don't understand why it costs so much to build a home.  They haven't purchased a home in 25 years!  I told them about $150 a foot, and now I see it in your post as supporting evidence!  I appreciate your experience and wisdom in cosntruction :)

Jun 27, 2018 09:25 AM #28
John Wiley
Right Move Real Estate Group- EXP Realty - Fort Myers, FL
Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA

Very informative and helpful post on new construction costs.

It will vary from region to region.

One thing we see now is the rising cost of building materials is making a heavy impact on new construction and costs.

Thanks for posting.

Jun 28, 2018 09:01 AM #29
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Peter Mark thank you for the very valuable report about the cost of building a house.

Jun 28, 2018 09:50 AM #30
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Excellent blog!  And with that title, should get lots of hits!  I am especially glad you pointed out the land excavation costs.  When the contractor starts digging--don't know what's underneath they may have to deal with.  Also I understand there is a shortage of workers to actually construct the house, do plumbing, electrical, etc.

Jun 28, 2018 01:02 PM #31
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Home and Condo Specialists

You provide so much information here. Buyers are going to like what they read!

Jul 07, 2018 03:18 AM #32
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Terrific information on new construction and all that is involved. Today we talked about how building cost has escalated, just in the last four months. And land cost can vary greatly. Construction cost has gone a long way from the measly $40 per square foot home that I built in 1986.

Jul 11, 2018 06:03 PM #33
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Having been there/done that...the short answer is: Always more than you think!

Jul 31, 2018 04:43 AM #34
Ron Barnes
Associate Broker at Berkshire Hathaway Home Services Georgia Properties - Jasper, GA
"Most agents claim they're #1 - I THINK YOU'RE #1!

Love this article! Well written, informative, and timely! Great choice for a blog when inventory is so short!


Jul 31, 2018 05:25 AM #35
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Building a home is very rewarding but not for everyone.  I know one thing... it will always cost more than planned for, and take longer than planned for.

Jul 31, 2018 07:58 PM #36
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