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.
Average Cost to Build a 1500-2500 sq ft House
- Average Entry Level New Home Cost - Expect to pay from $110-$130 costs per square foot. A 2,000 square foot new construction home will cost $240,000 on average.
- Average Mid Level New Home Cost - Cost is between $140-$160 cost per square foot. Expect to pay $300,000 on average for a 2,000 square foot new construction home.
- Average High-End New Home Cost - Prices can be from $160-$300 per square foot. A 2,000 square foot high-end home will cost $360,000 or more to build new. Pricing excludes lot and custom upgrades.
|Average Cost Per Square Foot||Region|
Exterior finishes like a stone facade and brick on the outside will add to the price. Custom high-end finishes such as brazilian cherry or a plank walnut, more crown molding, coffered ceilings, and copper gutters also add to the final price. Depending on whether you use a home builder or not, it pays to research all material costs.
These are fixed costs when building a new home. Things that you simply can't adjust. These are costs for building materials and labor. Square feet prices are just prices going up and in many areas labor is in 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 countertops 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 to 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.
Average cost of building a house
Average Costs Single-Family Homes Building Costs Are Ever-Changing and Local
Way back in my contractor years, I worked with national builders like Pulte, Mungo, Remark 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 from $50 -$75 to build out a new home. Now those costs vary 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 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, the carpet you can pay $110 a square foot for the basic new home build. If you go with hardwood floors, tile, solid surface countertop, 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.
Three Main Elements to Consider in New Home Construction Costs
The question of how much does it cost to build a house really boils down to three main areas. Design, Cost, and Marketability. Design is actually the most important to consider in my opinion when trying to figure out the 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 when building a house.
- Building cost determined by house design and house square feet
- Construction cost tied to the type of materials used.
- Price to build in relation to marketability and location
How Much Does it Cost To Build a House Starting Points
1. What Kind of House Design?
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. It brings the average cost way down come time to sell. If you get the design wrong, it will always be wrong.
- Cost of building a ranch versus 2 stories designed home
- Cost of building custom roof design
- Price to build a custom exterior facade ( brick vs. siding )
- Construction cost of architectural style vs. four square
- Building a house with a walkout basement or sloped lot
First, it's not just square footage. In other words, floor space 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.
Average cost of building 2 story house
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.
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. Something to consider with a ranch house is that you will need a wider lot. Wide lots for ranch homes in many communities are a premium.
Average cost of building ranch house
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 in relation to building costs? You have to think carefully about the difference between what we want and what we can afford. Then consider the function. The 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 the area you want to build in. This can either cost you or save you in the long run.
There are many home designs out there to suit your needs but affect costs in homebuilding. 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. What is the Total House Building Cost?
For any home, the 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.
|Item||Average Cost /Sq. Ft.||Average Cost Total 2,000 sq.ft.|
|Foundation & Excavation||$9.25||$18,500|
|Plumbing Sewer Connections||$8.90||$17,800|
|Doors and Trim||$4.25||$8,500|
|Permits & Utilities||$2.25||$4,500|
|Architect Design Fees||$2.50||$5,000|
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 skew the construction costs is the framing of 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.
Construction costs also 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. Environmental regulations and difficult zoning laws also ratchet up costs. No doubt difficult to build lots of add costs.
Final Stages of Construction Project Far From Over
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, the 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.
Interior Finishes and Kitchen Expenses Increase Average Building Costs
When building your own home, kitchens are the first place that people decide to spend their money because, ultimately, most people nowadays spend all their time in the kitchen. They may not be cooking, but they're tidying up. They're pouring a drink, getting a glass of water, talking to their kids, doing homework. It's become the heart of the US dream home. For resale value, It's where people will see the highest value. Come time to sell it maximizes the profit.
- Average Cost Flooring $2,400 – $23,500
- Average Cost Tile $2,300 – $11,500
- Average Cost Insulation $2,400 – $5,500
- Average Cost Cabinets $5,500 – $28,500
- Average Cost Plumbing Fixtures $150 – $550
- Average Cost Appliances $3,500 – $25,500
- Average Cost Fireplace $1,400 – $9,500
I think a lot of people base their kitchen budget on the cost of cabinetry. So they hear numbers like thirty thousand fifty thousand. And I think, all right, I can do about $50000 in the bank. Let's run now. But actually, the cabinetry is only a small portion of the overall expenses. Your two highest costs for construction are always electrical and plumbing, especially in a booming industry where there's such high demand so the contractor can charge it.
Your big-ticket items in a kitchen are cabinetry, construction, countertops, and appliances. Appliances, also sometimes people kind of breeze over what it's going to cost. This is why you need to plan. Always sit down, get all your numbers together as you can have a more realistic view of what your bottom line is going to be.
But don't hire your kitchen contractor and start building until everything is selected and priced. The interior finishes for a kitchen build can cause you stress. That's what's going to cause your whole budget to inflate. Kitchen counters is another area where you can splurge or save.
So everybody loves a natural stone counter like quartz, granite, or marble. You will pay top dollar for that. Alternatives are easily affordable like a butcher block is going to be for a fraction of what the stone will cost.
So think about your budget. You know, maybe you don't put the butcher block where the kitchen sink is because you're worried about water, but you could do it on an island or like a desk area. You can get creative, and nowadays, you can mix building materials. You don't have to do everything the same counter or every cabinet, the same color.
It usually takes 10 to 14 days to go have that courts or granite or marble cut to fit perfectly. So if you get those lower in first, you can template while they're still finishing up the uppers because you also can't tell your backsplash until the counter goes in. Not all custom cabinet makers are created equal. It's important to understand that because when you get quotations, and the average price varies, it usually has to do with the quality of the cabinets, but also the level of customer service you get.
When you're building a new home, and you want custom cabinets, you want a company that is going to respond to your inquiries, your concerns and deal with any problems as they arise. When you build and install a new kitchen, there is always something that needs to be customized. So put a cushion number in the kitchen when you build a house.
This is why you hire well-qualified millwork companies because of their customer service.Ok. I'll talk to you in a bit. Perfect. Seeing things in person is always the best because the way you experience the space, the way you notice the details is a higher level than an image or a video. Be sure to get samples in person. See a project finished first hand so you know what it will look like in your new house.
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What are the major points for house inspections when building a house?
Each phase in the construction process will have inspections. From the plumbing system to the roof and everything between. If in one phase a major flaw is found in the inspection, then the next building phase will stop from proceeding.
Most people think because it's new, there aren't problems, but nothing could be further from the truth. With slab houses, it's critical to keep the water away from the foundation and away from the slab. So you want to make sure that you have proper drainage in your yard. So, for example, this backyard is sloping away from the house. That's what we want to see. It can undermine the strength and stability, the slab, cause it to crack cork, cause all kinds of foundation issues over time.
In houses where they have engineered trusses, those things can't be repaired or modified without an engineer's approval. A lot of times, the trusses you will find they've been damaged during delivery.
Other times the trusses get modified during the construction of the home. Get an engineering letter just to protect yourself. Many times this goes out of warranty at that point with the builder.
3. Will the New House be Marketable?
I can write on the 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.
What Are The Land Preparation Costs in Relation to House Build Costs?
Before breaking ground, the cost to prepare the 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 electricity in the subdivision. You pretty much just have your building permits and you've got your connection fees. Connection fees are an impact fee 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.
average cost of building 2 story house with walkout
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 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. House build costs can vary within a state in fact. Costs are higher on a steep lot build.
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 farmland 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.
What is the 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 budget 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.
How Much Does it Cost to Build a House - 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. In some areas of the country, you will be surprised that there's even a labor shortage. The 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 has 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.
When trying to find the median costs of building a new home consider the whole price list. Look at the hvac, plumbing, electrical, lumber, architect fees, mortgage, hardwood floors, are just some of the items. Also consider if the home will be located in a planned community with public utilities available.
What are Total Costs for major systems cost like the hvac, plumbing, flooring, exterior finishes?
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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.
Cost of Building a House Versus Buying
In many cases, it is better purchasing an already built spec home then customizing it. It really depends on your current situation. Thanks for reading how much does it cost to build a house. Keep in mind 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. In many cases it is better purchasing a already built spec home then customizing it. 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.