Ever wondered how much would it cost to build a house? You must’ve spent hours looking for your dream house or just couldn’t find the right one in your locality. No matter what the reason, you must’ve opted to build your own home from the base.
So, how much does it cost to have a house built? It’s hard to provide an accurate and direct answer to this question, as the price tends to fluctuate based on different factors. Yet, it’s the first obstacle you need to overcome if building a house is what you want.
Building a house has numerous benefits. You get to live in your dream house with the design and layout you want, provided you can afford the costs. However, building your own home comes with costs you needn’t worry about while purchasing a home. Often, buying a property is more cost-effective than building one.
While you might think it’s worth the cost to build a home yourself, it’s best to be prepared in advance. Through this post, we will guide you on how much is it to build a house so that you can start planning and create a budget to cover the price of building a house.
How Much Should You Spend To Build a House?
The realistic answer to ‘what does it cost to build a house?’ depends on the amount you’re willing to spend on building your dream house. Self-building is a personalized experience where you get to include everything on your list if budget is not a concern.
When it comes to figuring out how much you’re willing to spend, you need to consider the following aspects:
- Equity was received while closing the deal on your current property.
- Funds obtained through a self-build home loan.
Even before you start building a home, the first expense you will incur is purchasing the land if you don’t own one. The cost of buying the land to build your dream house varies based on the state you live in. This is why you must factor in all the costs before starting the house-building project.
How Much Does It Cost To Build A House?
Building a house can cost almost anything from a few hundred thousand to millions. The factors that affect the overall cost of building a house are huge. In order to focus on where you want to spend your money, it’s advisable to break down the overall building cost into smaller portions.
Keep in mind a well-planned home construction project has the potential to pay dividends by generating a net profit that ranges between 25 to 30% if you ever plan to sell it. So, how much does building a house cost? Let’s have a look at the estimated cost of building a house.
Average Cost To Build A House
The price estimate data sourced from HomeAdvisor will help you plan your upcoming building projects. However, it’s always best to discuss the pricing with professional experts before you take the plunge. No one wishes to halt halfway through their dream project and leave it unfinished.
|National Average For Building A House||$284,000|
|Average Costs – Maximum Limit||$1,000,000|
|Average Costs – Minimum Amount||$80,000|
|Average Range of Self building||Ranges between $119,767 to $451,058|
Regarding new home construction costs, the cost per square foot to build a house ranges from $100 to $155 on average. In most cases, homeowners end up paying between $119,767 to $451,058, plus the land’s cost. The overall cost tends to vary based on location, design, and interior and exterior finishes.
Cost based on location
Location is a crucial factor affecting the price to build a house. From construction costs, the material used, and delivery to labor costs, it impacts almost everything. It also affects the price of the plot in which you plan to build your home.
The reason is the price is directly related to the real estate supply and demand. In certain states, the demand is much higher than in the rest, making it more expensive to construct your dream house. The average cost range per state as per HomeAdvisor is given below:
|State||Average Cost Range|
|Alabama||$200,000 – $380,000|
|California||$200,600 – $600,000|
|Colorado||$300,000 – $500,000|
|Florida||$240,000 – $350,000|
|Georgia||$100,000 – $400,000|
|Massachusetts||$250,000 – $600,000|
|Michigan||$225,000 – $265,000|
|New York||$250,000 – $950,000|
|Texas||$235,000 – $660,000|
|Washington||$200,000 – $450,000|
Average Cost To Build Per Number Of Bedrooms
The average cost of building a 2-bedroom house is around $93,000 to $155,000, whereas the cost to build a 3-bedroom house ranges between $248,000 to 310,000. To build a 4-bedroom house, the cost varies between $388,000 to $465,000. The final cost of the house varies based on the following factors:
- State you live in.
- Number of bedrooms.
- Number of bathrooms.
- Total square foot area.
- Type of materials and flooring used.
- Interior designs.
- Exterior finishing, Etc.
Cost based on size
Another major factor that determines how much a home will cost to build is its size. Specifically, the size is often calculated based on per square foot. In general, the construction of a new house costs around $100 to $200 per square foot.
If you’re planning to build a single-family unit of 800 sq. ft, the average cost is quite low and ranges between $80,000 – $160,000. On the other hand, the average cost to build a 1500 sq ft house is around $150,000 to $300,000, and the amount doubles as the square feet increases to 3000 sq. ft. Here’s a breakdown of price estimates from HomeAdvisor for constructing homes based on popular home sizes.
|Size||Average Cost Range|
|800 sq. ft.||$80,000 – $160,000|
|1,000 sq. ft.||$100,000 – $200,000|
|1,200 sq. ft.||$120,000 – $240,000|
|1,500 sq. ft.||$150,000 – $300,000|
|2,000 sq. ft.||$200,000 – $400,000|
|2,500 sq. ft.||$250,000 – $500,000|
|3,000 sq. ft.||$300,000 – $600,000|
If you’re planning to build luxurious accommodations with energy-efficient features or walk-in closets, the average cost to build a home goes beyond $500 per square foot. In this case, an 800 sq. ft house can cost more than $400,000, and a 5000 sq. ft customized luxury home can cost approximately around $2.5 million.
How Much Does It Cost To Build A Home? Average Cost Estimate
The average cost of building a house keeps changing depending on various factors, including size, materials used, labor, location, and current real estate market trends. While calculating the total cost of building a home, you also need to consider the finished interior space and unfinished space, including driveways, garages, and decks.
All this makes it quite impossible to come up with an accurate one-size-fits-all cost estimate for building a house. So let’s look at the average cost it might take to build your dream house.
Building a house yourself
How much does it cost to build your own house? If you happen to be a prospective homeowner who wishes to build your own home to save money, it happens to be the best option available.
Self-building costs less than $70 per square foot, and you save an average of around 25% on construction costs. When it comes to a typical house that costs around $248,000 on average, you get to save around $62,000 in total by building a house yourself.
Building a customized house
Depending on the location, design choice, size, and interior and exterior finishing, the cost to build a customized house varies between $200 – $550 per square foot. Most individuals who do not own land must also include the land value. On average, you may have to spend around $1500 – $3000 on land preparation for building a house.
Next, you must find the right general contractor in your locality to start the construction. To get bids from the real estate contractor, you will have to hire an architect who will turn your ideas into a blueprint necessary for the planning agents and structural engineers to work with.
Hiring a good architect is costly and consumes around 8 to 15% of the total construction cost. The architect provides construction documents, detailed drawing specifications, and overall project management for the amount paid.
After the blueprint and drawing specifications are ready, you need to hire a custom home designer, adding 10 to 17% extra to your construction budget. If you’re looking for high-end professionals, they charge around $30,000 to $50,000. Alternatively, if you wish to save up to 30% on construction costs, you can choose predesigned options from a well-established home developer.
Building a modular house
Modular houses are constructed in sections and built in climate-controlled manufacturing environments. Each of these homes is built per local and state codes to get an inspection pass after construction.
The average cost to build a modular house ranges from $80 – $160 per square foot. When compared to the different fabricated building structures, modular houses happen to be the most expensive ones, where the price estimate for a 2500 sq. ft house ranges between$200,000 and $365,000.
If you opt for a base modular house with no alterations or customization, the cost will be $50 per square foot. The cost of a custom modular house with upgrades can go up to $60 per square foot. A fully finished modular house with site preparations, porch, foundation, etc., can cost more than $110 per square foot. In addition to the base price, the cost also consists of utility hookups, driveways, taxes, landscaping, permits, and other fees.
Building a Small house
To build a small house of around 600 sq. ft, the average cost ranges between $50,000 – $70,000. In order to save money and avoid unnecessary expenses, you can construct a home that qualifies as a small house.
In this case, the building materials do not cost more than $31,000, and the labor costs will be around $25,000. In addition to the construction costs, you will have to fork out another $20,000 to cover building permits, contractor costs, utility hookup, and construction plans.
Now you know why small single unit houses are more in demand. But before you constrain the size, think about how much space you require to accommodate your entire family. Building a house is a lifetime investment, and no one wishes to cram their family into a house that’s too small or build a huge house that’s not needed.
Cost of Building A House Checklist
Are you planning to build your own home? Building a custom house will give you more control and influence on the project than buying a pre-existing house. However, building the house yourself entitles greater responsibility, as you must make major decisions along the way.
If you are well acquainted with the construction process and building plans, it’s all good. Or else, you will have to hire a real estate expert and contractor to guide you through the project. Moreover, creating a checklist will enable you to navigate the home building process easier.
- Create a budget – Consider the various factors and come up with a cost estimate per square foot for building a new home. Once you have set up the budget, you can approach the lender to avail a mortgage loan. With the budget ready, you will be able to prepare the designing and finishing plans confidently.
- Find and purchase the property – You need to find the right location to build your new house. If you’re planning to purchase undeveloped land in a rural area, you must consider various factors and the cost needed to upgrade the land. To purchase a plot having a house, you will have to factor in the costs needed to demolish the existing house to build a new one.
- Developing construction plans – After purchasing the plot, you’ll have to decide on the number of bedrooms, kitchen size, bathroom size, materials used, interior and exterior finishes, etc.
- Building the house – With all the construction plans and budget in place, your contractor can start building the house once the permits have been approved.
Is It Cheaper To Build A House Or Buy One?
Whether you wish to build a home or buy a house, the associated costs depend on various factors, which is not easy to compare and find out which one saves you a lot of money. In general, building a house could range between $50,000 to $100,000 and above, based on numerous factors.
The price might increase even higher if you do not own the land. On the other hand, owning the land further reduces the building cost of your home compared to buying a house. The reason is that land prices vary from state to state, and the cost can be extremely high in some locations. This is why it is advisable to build a less expensive custom house. For custom-made houses, you get to do exactly what you want, then purchase a house first and make the necessary renovations to meet your needs.
The cost of buying a house depends on the quality, and the renovation works the house needs. If the house you’re planning to buy is in poor condition, the purchase value will be comparatively less. However, you will have to estimate the costs needed for repair and renovation, increasing the overall expenses.
Home Buying Vs Building Costs
As per the US Census Bureau, for building a new house, the lowest price will be around $100 per square foot in the South, and the highest will be around $155 per square foot in the Northeast. On the other hand, if you’re planning to buy an existing house, the National Association of Realtors estimates the cost of an existing single-family house to be around $260,000.
In general, there’s not much difference between the cost to build a house or purchase a house after considering the various factors. Whether you’re planning to build a custom house in a specific area or purchase a small house, you need to carefully research and analyze the real estate market before making the final decision.
Instead of securing the finances to purchase an existing home, it is much easier to build a house from the ground up. While the average cost to build a house is around $284,000, most house builders spend somewhere between $110,000 – $450,000 to build their dream house.
In order to find out how much money it will cost to build a home, it’s best to consider the numerous factors that impact the cost and come up with a budget in advance. In this way, you will not be surprised by the additional expenses that may arise as you advance into the project.
Though predicting the accurate cost for home building is not easy, once you create an outline for the responsibilities, you can easily come up with a budget. Make sure to consider your financial credibility and ways of finance before you build your own house.
A mortgage loan will help you cover the cost of building your dream house. To get the approval from the lender, you’ll have to provide the cost estimates, detailed construction plan, and creditworthiness. You may even need the assistance of an experienced real estate expert throughout the home construction project.