How Much Does It Cost to Build a New House? An In-Depth Look!

How Much Does It Cost to Build a New House?

Is it better to construct or purchase a bespoke home?

That is the dilemma or decision that most individuals confront when looking for the home of their dreams.

It might be startling to learn about the prices required if you don't have firsthand experience of the realities of the costs of building vs. buying your own house.

If you've seen any HGTV shows, you're probably aware of the price difference between existing homes or fixer-uppers and new construction.

Consider the following distinctions: You have a building already built on a property in a desirable or up-and-coming area for an existing house or a fixer-upper.

 Building from the ground up entails looking for a parcel of land and budgeting for finance, building supplies, labor costs, and any other expenses that may arise throughout the construction process.

How Much Does It Cost to Build a New Home? The Entire Picture

According to the most recent Census Bureau statistics (2019), the average contract price for a contractor-built single-family home was $345,800, with a price per square foot of $126.15 — or about 2,977 square feet.

It is critical to recognize that expenses might vary greatly by area. The size and quantity of modifications required will also have an influence on the cost of construction.

Looking at the cost per square foot by area, the map below shows the average cost per square foot for a contractor-built single-family house by region.

The Southeast is the most affordable, at $110.19 per square foot, while the West remains the most costly, at $158.73 per square foot.

Costs might vary greatly even within an area. Expect suburban Houston to be more expensive than, say, the outskirts of Abeline, Texas.

The materials and finishes chosen by the owner can have an impact on construction expenses.

The cost per square foot might range between $100 and $200. The cost of ultra-luxurious houses might exceed $500 per square foot.

Of course, the size will have a considerable impact on the entire cost of the property.

To put things into perspective, the range of total costs for a home at $100–$200 per square foot and total square feet ranging from 1,000 to 3,000.

A Cost Breakdown of Building a House

1.  Land

2.  House plans

3.  Site work

4.  Foundation expenses

5.  Framing and lumber costs

6.  Exterior finishes

7.  Major systems

8.  Interior finishes (plumbing, electrical, drywall, cabinets, built-ins, countertops)

9.  Finishing touches (porches, driveway, landscaping)

10. Other costs

Before the first shovel is thrown into the ground, it's critical to understand the different — and frequently considerable — expenditures associated with building a house at each step.

1. Land: Costs of Property Development

On the HGTV show 100 Day Dream Home, a couple hires a realtor-builder/designer team to construct on a land they already own or acquired from relatives. 

The assumption is that the homeowners have done their homework and hired a real estate lawyer to help them with all of the intricacies and paperwork related to the land.

These data include unambiguous ownership of the land, deed and zoning limitations, air rights, a survey map indicating borders, the location of the septic system, access, easements, and utilities such as water and sewage disposal.

What if you don't have the "immediate and ideal" property?

That's all the more reason to employ a top-rated real estate agent to aid in finding the right lot and custom house builder, who can help with contract writing, contacting with lenders for a construction financing, and supervising all the procedures linked to the acquisition of a lot.

The price of the property will range from $3,000 to $150,000, depending on its size and location.

The NAHB Construction Cost Survey for 2019 found a decreased trend in lot size between 2009 and 2013 - "In 2013, the average size of a home fell from 18,871 square feet to 15,167 square feet.

It rises to 16,381 square feet in 2015 before plummeting to a new low of 14,539 square feet in 2018 "..

The considerable rise in lot size in 2019 (average of 22,094 square feet) contrasts with the previous declining trend seen by US Census statistics.

Costs of Building a New Single-Family Home by Phase

The National Association of Home Builders ("NAHB") polled its member builders to estimate the average cost of constructing a new single-family home.

The data from that poll was utilized by the organization to establish the average cost of each step of building a new house.

According to the NAHB study, the average single-family house building cost was $296,652, with a home size of 2,594 square feet and a construction cost per square foot of $114.36.

The average sales price in the NAHB survey was $485,128, which was much higher than the statistics from the US Census survey.

The average lot size in the NAHB survey, on the other hand, was substantially bigger than that in the US Census statistics.

The average sales price, excluding the cost of the finished lot, was $395,588.

2. House Plans

Although it is not explicitly stated in the building phase chart, home blueprints are required before work can begin.

The floor plans will be an important component in deciding the home's building cost. 

Permits are not given in many towns, and work cannot begin until the local building department analyzes and approves the home plan plans.

Architect, engineer, draftsperson, and surveyor fees may rapidly add up. The most current HomeAdvisor rates are shown below.

Architects, for example, might charge anything from $70 to $250 per hour depending on their level of skill.

An architect's total design expenses might range from $2015 to $9050 or more. 

However, they frequently charge a portion of the overall building cost, ranging from 5% to 20%.

Engineers often charge between $100 and $150 for their services.

Land surveyor costs generally vary from $345 to $675, depending on the size, age, and location of your lot.

3. Site Work

The site work — or site development expenses — might vary considerably depending on the property acquired.

To preparation for building, the land must be cleared.

This includes the removal of trees and any other debris that may cause a delay in the actual construction of the home. It may be essential to rough grade the site if necessary.

Is your property already serviced by utilities? If not, you'll need to connect the lot.

Depending on how distant the property is from electric power, this cost can range from $1,000 to $10,000 or more.

Is your municipality responsible for water and sewage?

If that's the case, the cost of transporting it to the residence might be $4,000 or more.

Otherwise, you'll need to dig a well and construct a septic system, which might cost $5,000 to $25,000.

Don't forget about building permissions, which must be obtained before any work can begin.

Permits assure the safety of the project as well as compliance with building, construction, and zoning laws. 

Permit fees might vary depending on the size and complexity of the project.

They can range from $150 in rural areas to $10,000 for luxury properties in heavily crowded areas.

Before you begin, be sure to check with your local building department.

Fines for building without a permission can be steep, causing delays in the construction process.

Depending on where you reside, you may also be charged a "impact fee."

 Municipalities levy these one-time levies on new development to assist cover the costs of developing new infrastructure. 

Impact fees differ per municipality and, in most cases, by the size of the new development. Expect to pay around $3,000 in most situations.

4. Foundation

Now we're getting set to start building! The first stage is to dig the foundation.

This necessitates large machinery and highly trained workers, both of which are costly. Before laying the foundation, they will check that the ground is level.

Get a soil analysis and frost line depth for your area to evaluate and build the safest foundation for your home.

According to Better Homes & Gardens, the cost of dirt work is $7,600, which includes removing topsoil, excavating the foundation, installing drainage and pea stone, and backfilling.

The average cost of installing a new foundation in the United States is around $10,000.

Prices range from $12,000 to $80,000 for a 2,400-square-foot house, with an average cost of approximately $27,000.

Your foundation building prices will also vary depending on the type of foundation you choose.

HomeAdvisor cost estimates for the most popular foundation types are shown below.

The foundation is a concrete slab.

A common foundation option, homeowners may expect to pay $5,000–$13,000 for a monolithic slab or $7,000–$21,000 for a stem wall.

Crawlspace edifice. This foundation is made up of a stem wall and post-and-piers. The costs range between $7,000 to $21,000 on average.

The foundation of the basement.

This foundation necessitates extensive excavation and, as a result, can cost $10,000–$100,000+ even if left incomplete.

Basements, on the other hand, provide several advantages in terms of return on investment.

5. Framing & Lumber Costs

The cost of framing comprises the roof, trusses, and sheathing for the house, as well as the materials and labor to create the frame.

This is frequently referred to as the "skeleton" of the house — and it is at this point that your home begins to take shape.

The typical cost of framing a 2,000-square-foot single-story home, according to HomeAdvisor, is $14,000–$32,000, plus $4,000–$16,000 for wall sheathing and wrap.

Framing a wall.

The cost of exterior wall framing ranges from $7 to $16 per square foot.

If you choose 2x6 external framing over 2x4 framing, your wall framing will be slightly more expensive – but the benefits may be worth it.

Framing of the roof. Pricing is typically in the $6–$9 per square foot range. The more complex the roof, the more costly the roof framework.

Trusses. Roof trusses, as opposed to roof stick framing, are pre-fabricated, engineered triangular roof framing sections that are installed off-site.  

They may cost $6,000–$7,000 for a 2,000-square-foot house, but they will save money and labor over installing the complete roof on-site.

Sheathing. What exactly is wall sheathing? The flat wood planks that cover the framework and the roof.  

This usually costs between $2 and $8 per square foot. As a weather-resistant barrier, house wraps can be installed.

Current Lumber Prices: A News Bulletin Lumber prices have risen in the last two years, dampening the aspirations of many potential homebuyers.

Because of the increase in lumber prices, the average price of a single-family home has climbed by more than $24,000.

According to Fortune, on April 16, 2021, the price of lumber reached an all-time high, rising to $1,048 per thousand board feet, a 193 percent increase over the previous year.

Unfortunately, analysts do not expect prices to fall until the end of 2021 as mills struggle to restore additional timber capacity owing to the pandemic and unexpected demand.

6. Exterior Finishes

This phase of the new construction includes external wall finishes, siding, roofing, doors, garage doors, and windows, all of which can be completed by a general contractor.

It is at this phase that your "skeleton" begins to resemble a dwelling.

The external wall treatment, whether brick, wood or vinyl siding, stucco, or shingles, will be a considerable price considering the number of square feet it covers.

 Expect to pay anything between $6,000 to $20,000, with an average of around $15,000.

Because of the vast range of options available, the cost of windows and doors might vary.

According to the NAHB study, these are worth $11,000 each. Don't forget about completing the roof, which can cost an additional $10,000.

7. Major Systems: HVAC, Electric, Plumbing

With the outside completed, it is time to concentrate on important inside installations such as electrical, plumbing, and HVAC systems.

All of these must be installed by professionals before the flooring, drywall, and other interior fixtures and finishes can be installed.

According to Rocket Homes, these large systems may cost as little as $30,000 and as much as $75,000.

Electrical wiring typically costs between $20,000 and $30,000; HVAC might cost between $1,500 and $13,000; and plumbing installation costs between $1,500 and $20,000.

According to the NAHB, the average cost for these key systems is $43,668 based on 2,594 square feet of finished floor space, which is the typical size of a new single-family home according to their study.

8. Interior Finishes

We are now entering the most expensive – and maybe most fun – phase of construction: interior finishing.

Materials and installation generally cost $50,000 to $175,000 – or even more, depending on the kind and quality of fixtures, flooring, appliances, cabinets, and other design elements used.

The NAHB's total cost of $75,259 assumes an average cost of $29.01 per square foot for all interior finishes.

This stage can sometimes be stressful owing to last-minute modifications, material shortages, and appliance delivery delays.

9. Finishing Touches

The long-awaited light at the end of the tunnel has finally shown! It is now time to focus on the external buildings, such as the porch, sundeck, or patio.

Don't forget to include landscaping, a garden, and a driveway (options: gravel, asphalt, concrete, or paver).

Concrete will cost about $3,000 for a standard driveway.

Pricing will be more if you want something more complex, wider, and longer.

These projects will cost little more than $20,000 in total.

Expect to spend $7,000 on landscaping, $7,000 on the driveway, $3,000 on the patio or deck, and $3,000 on cleanup.

10. Additional Costs

Make a $11,000 contingency fund to cover miscellaneous construction expenditures, such as improved fixtures, a patio, or a porch.

Other expenses are estimated by the NAHB to be $11,156, or 3.8 percent of total building costs.

According to the NAHB, the average cost to build a 2,594 square-foot home (based on the 2019 survey) is $114.36 per square foot, for a total cost of $296,652.

This building cost, however, does not cover land, lot finishing, marketing expenditures, sales costs, or the contractor's profit margin.

How Much Should I Expect to Pay a Home Builder? How does that work in practice?

Of course, not everyone builds their own home or hires a contractor to construct their ideal home.

For anyone thinking about purchasing a newly built home, here's a breakdown of the remaining line items from the overall building cost to the sales price.

We have data from the NAHB's construction survey to assist us understand how we go from the cost of building a house to the sales price.

Buyers frequently believe that builders are "making a killing" in this market. However, the evidence does not support this.

Building a bespoke house may be a difficult and time-consuming undertaking.

However, thorough planning, knowledge of cost volatility, and comprehension of cost averages may all assist you with estimations.

Remember that you may always contact the expert who is assisting you and ask for help.