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How much does it cost to build a house?

If you are planning to own a house, the thought of building one from scratch has probably crossed your mind more often than not. You might have weighed the pros and cons of buying and building a house and decided to settle on a building.

It might seem cheaper to build your house since the average price of a single-family home is around $300,000, whereas building costs anywhere from $150000 to $500,000 depending on your needs. However, before you rush to the bank, you should be aware of different factors affecting your project's overall cost. The building cost depends on size, labor, materials, location, and the latest real estate trends.

In this article, we will discuss the average cost of building a house, so buckle up.

The average costs to build a house

The average cost of building a home ranges between $100 and $200 per square foot, with the median price at around $150. 

In their special studies edition, the National Association of Home Builders showed that the average cost of building a house is about $154. The factors affecting this cost include the location of construction, scope of the project, availability of labor, quality of finishes, among other factors. 

In high-end neighborhoods, the costs can skyrocket to over $400 per square foot.

Average cost by square foot

We’ve summarised the average amount you’d expect to spend by the square footage of the property.

Square Feet Average construction cost
600 $60000-$100000
800 $80000-$160000
900 $90000-$180000
1000 $100000-$200000
1200 $120000-$240000
1500 $150000-$300000
1600 $160000-$320000
1800 $180000-$360000
2000 $200000-$400000
2500 $250000-$500000
2700 $270000-$540000
3000 $300000-$600000
4000 $400000-$800000
5000 $500000-$1000000

Is it cheaper to build your own house?

If your focus is only on the initial building costs, building a house is cheaper than buying one. However, if your focus is on the overall project costs, building a home happens to be the more expensive alternative.

According to a study conducted by the National Association of Realtors, the average cost of buying a house is about $296,652, while the average cost of building a house is $485,128. 


This is almost twice the price. 

However, remember that these are average figures. The cost of building a house depends on your requirements as you are making a custom product from scratch.

Alongside the immediate cost of building a house, you also need to consider other cost savings from doing so.

Building your own house allows you to customize its requirements to suit you. A new home also has way fewer maintenance costs as everything is new. It takes some time for the conditions to deteriorate. You will also not pay for any unwanted amenities that another homeowner desires, but you will only pay for what you choose for yourself. In building a home, you do not run the risk of being outbid in your project by other buyers.

There are several ways you can save money while building your house. One way you can save is by taking up the role of the general contractor in your project. If you took up the contractor's position, you would save up to 40% of the project's cost. Using the average cost estimates of building a house, you would end up saving over $190,000.

If you take up the less demanding tasks such as cleaning, painting, and carpentry, it is possible to save an extra 5% on your project.

As you can see, managing your project as the general contractor and taking up your project's labor leads to huge savings. By taking up the contractor's role, you will also manage to increase your tax savings. Building a home takes hard work and dedication, but those willing to learn and do it will reap its benefits.

building cost

What impacts the cost?

The costs of building a house vary majorly with location and client preferences. After the planning stage and acquisition of blueprints, it is now time to get into the building stage. The expenses of the building vary drastically, and it is prudent to have the expected expenditure within your budget. There are design issues such as functionality and geometry that affect the building costs. Other factors such as environmental, socio-economic, and legislative constraints exert considerable bearing on building costs, as discussed below.


The project's location influences its cost. High-end neighborhoods attract high-value sites. 

The land acquisition rates are also higher in high-end areas. There is a commercial construction index by the state that governs construction regulations. Low-value projects would look inappropriate in such regions, and the local development plans might also constrain what can be built in such areas. 

Developed urban locations also affect the labor costs as the local labor costs, constraints to the accessibility of materials, and additional security measures.


The foundation is probably one of the most expensive and essential parts of a structure. Many factors affect both the choice and cost of the foundation. 

The soil type and drainage of an area determine the proper foundation for the project. Areas with loose soils need deeper foundations. 

Deep foundations are costlier than shallow foundations. Concrete slab foundations range from $4,500 to $21,000. They are cheap and straightforward to construct as only a single concrete slab is poured. 

Shallow foundations are in the mid-price range as one has to dig holes and fill them with concrete. Deep foundations have the highest price because of more digging, materials, specialized labor, and equipment.


A bigger house costs more, but the construction cost per square foot drops dramatically as the items are now spread out over more extensive construction footage.

Finish and Fixtures

Coveted high-end finishes come at an increased cost compared to ordinary options. Granite countertops cost between $40 t0 $100 per square foot. Other finishes like hardwood flooring will also heavily cost you. You should, therefore, always budget accordingly when it comes to aesthetics.


Typical metal roofs cost from $5000 to $11000, but the prices vary if you plan to deviate from the regular traditional asphalt roofs. Environmentally friendly solar panel roofs cost up to $15000 in some regions.

A roof with simple geometry and basic shape will also cost more than a roof with a complicated layout and angle lines.


Fixtures and appliances cost anywhere from $50, and they heavily affect building costs. Kitchens and bathrooms usually are expensive to construct as they have the most expensive fixtures and appliances.

Additional Features

Additional luxurious features will also cost you more in construction. A porch can cost you up to $20000, and an indoor pool can also cost you up to $28000. You will also incur more maintenance costs with these additional features.


Plumbing works cost from $600 to $1600, depending on the water fixtures, labor costs, home layout, and distance between plumbing fixtures. The choice of fixtures and connections also adds up to the cost estimates.


A house with a simple geometric design is more economical than a house with a complex design. The complexity takes more time and expertise to achieve and, consequently, more money. A home with a complicated floor plan will cost more per square footage.


Local agencies have regulations surrounding the setup of buildings in the area—the average permit costs from $441 to $2000. The price can also go outside this range. For instance, some small cities charge as little as $100 for a permit, but the price skyrockets to several thousands of dollars in large cities.


The labor cost varies with each region and city, with higher labor costs in metropolitan areas than suburban and rural areas. The project's complexity also affects the labor as complex projects need specialized skills compared to standard projects.

Utility Lines

Depending on your project's location, you may need electrical, sewer, and gas installations. These utilities have their hookup fees and associated permits. Utility lines also come coupled with state-level and local taxes. These taxes vary depending on the construction type and scope of the project.

Land Cost

According to the NAHB, land averages at about $90000 for 22000 sq. ft of land. This is close to half an acre. You can find land for cheaper rates, but you should check whether sewer, lines, and electricity connections are in proximity when looking for land. If they are not, you will end up spending more on construction. Landscaping and outdoor structures such as driveways can also increase the overall cost of your land.

breakdown of costs

A breakdown of average costs

The material cost breakdown is dependent on the factors dictated above. The prices vary on the home types, materials, and construction types. The total costs can be divided into:

  • Sitework
  • Foundation
  • Homeframing
  • Finishes (Exterior)
  • Main Systems
  • Finishes (Interior)
  • Final touches
  • Miscellaneous
  • Sales

1. Sitework

After settling on a property that you want to develop, you will have to part with some money for permits, inspections, and building plans. The most expensive costs here include costs on water inspections and sewers. This will probably chop off $5000 from your budget. The total cost of building permits is about $4,000.

You also need an excellent architect to help you piece together a good plan. Work in collaboration with your builder to ensure the project is sustainable for building. Good architectural services cost around $3,000.

The government will also take a piece of the cake on what are known as impact fees. These are the costs for services such as roads, water treatment, and parks. These costs may add up to $2000. You also need an extra $2,000 for a buffer, and this totals the site work costs to about $16,000.

2. Foundation

The actual work starts during the construction of the foundation. Excavation for the foundation requires expert equipment and skill to ensure the ground is level before laying the foundation. 

If many huge rocks lie underneath your piece of land, the costs could shoot up even further. 

After excavation, the builder will lay the foundation for your home. Houses with a basement have costlier foundations compared to houses without. 

The house might also need some retaining walls to prevent the soil from crumbling into your foundation. 

The labor, equipment, and materials typically cost $25,000, but you may need to add an extra $1,000 for unplanned costs in the foundation. This totals the cost to about $26,000.

3. Framing

This is the part of construction that takes up the majority of the construction costs. 

This is where the house starts to take shape, and you will need a lot of concrete and lumber for construction and formwork. The price can go up to $36,000. 

If you have not added trusses to your roofing cost, you will need an extra $4,000 to cover their costs. 

After framing, you need to budget an additional $1,000 for sheathing. 

A sheath is a protective layer to protect your frames and trusses, and this brings your total framing costs to about $41,000.

4. Exterior Finishes

Finishes are pretty expensive as they require a lot of material. The exterior perimeter wall costs about $15,000. 

Other external finishing costs are doorways, garages, and windows. These costs add up to around $9,000, while finishes on your roof will cost another $8,000. 

Do not forget to equip yourself with a $1,000 cushion. This will cost about $33,000.

5. Major systems

Major systems like plumbing and electricity installation also take up a sizable percentage of the project cost. 

Plumbing costs about $11,000 while electricity costs $10,000. 

HVAC costs about $11000. You can cut costs here, but it is best to equip yourself with the best systems for convenience's sake. 

You should also note that the costs here do not refer to prices on actual fittings of fixtures such as toilets, sinks, and lights hooking your systems. 

When you add an extra $1,000 as a cushion, this will bump up the costs to $33,000.

6. Interior Finishes

The interior finishes are pretty expensive, making sense as you will spend a lot of time indoors. 

The finishes range from countertops, doors and mirrors, insulation, flooring, plumbing fixtures, painting, appliances, drywall, and lighting. 

The average finishing costs are about $68,000 as there are a lot of expenses to cover.

7. Final Touches

The final steps, such as landscaping and building a driveway, require extra brick and mortar in your budget.

Landscaping costs about $6000 while the driveway costs about $5,000. 

Surrounding structures such as a deck or porch can cost $3,000, while the final clean-up costs are about $3,000. 

This totals the costs to about $17,000.

8. Miscellaneous Costs

Beyond the buffer costs we included in each major category, you need an extra $4,000 of the overall construction project's miscellaneous costs.

9. Sales

The heaviest and final brick on your project is the profit margin costs for your builder and vendor.

Their profit margins come in at about $46,000.

Other costs include the overhead and general expenses that amount to $22,000. This will total the costs to about $68,000.

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Be prepared for unexpected costs.

When you consider building, the starting price is not what you will pay.

During the cost estimation process, estimators leave a lot of room for contingency. 

It is, therefore, crucial to keep this in mind when making a budget. 

Unexpected costs are not allocated to any specific category of expenses. A safe buffer for contingencies ranges from 3% to 10% of the project's budget. 

Larger-scale projects have higher contingency costs of up to 20% of the total project costs

A contingency fund may cover some of the expenses, including accidents, change orders, material upgrades, malfunctions, or even acts of God.

Time is construction money, and contingency plans prevent the project from stalling due to unavoidable circumstances.


Frequently asked questions

Can you get a loan to build a house?

Yes! Of course, you can get a loan to build a house. Unless you are paying cash, you will need a loan to finance your building. House building loans come in two types. Some lenders offer a one-step loan that accrues interest during construction and turns to a mortgage during completion. Other lenders provide an interest-only type of loan on the project, usually at a prime fee.

What is the cheapest type of house to build?

The cheapest house to build is a prefabricated container. It is small, but it falls within a minimal budget of as low as $15,000. If you want something simple with minimal features, you can build a prefabricated house. A 3 bedroom prefabricated house costs are as low as $50,000.

Is now a good time to build a house?

Right now is a difficult time to buy a house as there is limited housing stock. According to Redfin real estate company, the overall house supply is down 22%. That means if you want to change, you will have to build a home. Builders are in construction mode, building many houses to cover the demand, making it the perfect time to build a house.

Is it cheaper to buy or build a house?

The answer here varies on circumstances. At the outset and sticker price alone, buying a house is cheaper than building. Buying a house means one can move in quickly. Building a home, however, gives one the freedom to customize. You do not need old features that a former homeowner wanted. You also won't have renovation and retrofitting costs. All the money you invest will go into something new. A new house is cheaper to maintain, more efficient with its appliances and has a higher resale value.


Building your house can be a huge undertaking. Working with experienced professionals and a realistic budget gives prospective homeowners the best deals in owning homes. Plan meticulously for the best fit within your budget.