✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.
In 2023, the average cost of building a home will be between $112,000 and $460,000. Building a house might cost millions of dollars, depending on the area and style you choose. Additionally, it takes homeowners 9 to 12 months on average to build a house.
Does it truly make financial and time sense to build your own home? Should you purchase a new home instead?
Can You Build Your Own House?
Yes! You can certainly build your own home if you have a perfect plot of land in the neighborhood you wish to reside in. However, you must account for the money and time required to build a house.
Building permissions are also required. The cost of obtaining a permit is based on the cost of the home or the location of the construction. The fee for the permission is rarely a set amount. County-specific permit regulations and fees exist. More details on house building permits can be found on the website or in person at the county office in your area.
» Permit Costs: Read more about home building permits.
Is it Cheaper to Build or Buy a House?
The cost of buying an existing home is typically less expensive than the cost of creating one. However, keep in mind that when you build your own house, you receive a brand-new house that is tailored to your requirements.
With an average cost of $285,675, the price of building a home in the US can range from $112,000 to $460,000. Excavation charges, permits, other costs, and land costs are not included in this sum. Depending on the type of construction and upgrades, a home might cost millions to build.
The median sale price of a home is $388,310 as of December 2022, if you’re thinking about purchasing one.
Up to a year is needed to finish an owner-built home. Building a house takes nine months, even if you hire a contractor. Thus, building a new home requires both money and time.
Not buying? Want to sell your home?
How Much Does it Cost to Build a House?
The average cost per square foot to build a house is $150 sq. ft., excluding land costs, permit fees, excavations, and other costs.
Average Cost of Building a House
| Range | Home Building Cost |
|---|---|
| National Average Cost | $285,675 |
| Minimum (800 sq. ft.) | $80,000 |
| Maximum (5,000 sq. ft.) | $1,000,000 |
| Average Range | $112,000 - $460,000 |
Source: HomeAdvisor
The statistics listed above are averages that can change depending on a variety of elements, including kind, size, labour demand, material pricing, etc.
Average Cost to Build a House Per the Number of Bedrooms
Below is the table showing the building costs per the number of bedrooms for a home:
| Home Area and Range | Number of Bedrooms | Average Cost of House |
|---|---|---|
| 976 sq.ft. to 2,400 sq.ft. | 3 Bedrooms | $146,400 |
| 1,900 sq.ft. to 2,800 sq.ft. | 4 Bedrooms | $285,000 |
| 2,500 sq.ft. to 3,000 sq.ft. | 5 Bedrooms | $375,000 |
Source: HomeAdvisor
Average Cost to Build a House by Square Footage
Here is a table of home construction expenses broken down by square footage:
| Size of the House | Average Price |
|---|---|
| 1,000 sq. ft. | $100,000 – $200,000 |
| 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 |
Source: HomeAdvisor
Home Building Costs Breakdown
Here is a breakdown of the costs associated with creating a 2,500 square foot home to help you get a better idea:
Hard Costs of Building a Home
Hard costs are costs directly associated with the construction of a home that are used to estimate when the project will be completed.
1. Material Cost to Build a House: $125,000
About 50% of the total cost of construction is made up of building materials. The cost of building a home is estimated to be $50 per square foot.
In comparison to 2021, the price of building materials increased by 5% to 10% in 2022. This was brought on by the rising demand for siding and other building supplies as well as the lengthened delivery times.
Prices for new homes are anticipated to fluctuate in 2023. In 2023, Associated General Contractors of America Chief Economist Ken Simonson predicts that some products would see a reduction in price increases and shortages while others will continue to be volatile.
Cement and concrete products are likely to have continuing shortages as the nation has not added any cement production since 2009 while demand is growing, particularly from infrastructure projects.”
– Ken Simonson, Chief Economist at Associated General Contractors of America
Here are the material costs you must account for while building your home:
- Flooring Cost: $2 to $20 per sq. ft.
- Drywall Cost: $12 to $20 per panel
- Lumber Cost: $10 to $12 per sq. ft.
- Siding Cost: $1 to $14 per sq. ft.
2. Contractor(s) Charges: 10% – 20%
To supervise the building process, you need a contractor or company. Employing specialists, estimating prices, and finishing projects on schedule are all tasks carried out by contractors.
In the process of building a home, a general contractor employs numerous other specialists. Among them are:
- Electricians
- Architects
- Floor installers
- Plumbers
- HVAC installers
- Carpenters, etc.
A contractor typically charges between 10% and 20% of the entire cost of the project. The cost of a general contractor relies on a number of variables, including the type of property, the level of detailing, the materials used, and the labour. In addition to the contractor charge, remember to factor in the hourly fees of each specialist.
3. Electrical Costs: $7,500 – $12,500
Electrical costs per square foot for new building range from $3 to $5 on average. The rough-in and finishing work are also included in this sum.
Depending on the size of the property, the type of wiring, the type of wire used, and other factors, you may spend more or less on electrical work. You can do the electrical work yourself to save money, but an electrician is still required to examine the connections. Up to $120 per hour is what some electricians would charge.
4. Roof Installation Costs: $5,500 – $33,000
The roof’s slope, size, and material will all affect how much it will cost to replace your roof. Costs per square foot for various roofing materials are shown in the table below:
| Roofing Material | Average Cost Per 100 Sq. Ft. |
|---|---|
| Asphalt Shingle Roof | $219.55 |
| Tile Roof | $1,019.34 |
| Wood Shake Roof | $635.13 |
| Slate Roof | $1,319.92 |
Source: ProMatcher
5. Plumbing Costs: $12,000
Costs associated with plumbing include setting up fixtures like toilets, faucets, washbasins, bathtubs, etc. Plumbing fixture installation costs for new construction are roughly $4.50 per square foot for homeowners.
To mend the pipes and install sewer lines, you need a plumber. In addition, when creating a customised home, you must install modern appliances like geysers, washers and dryers.
6. HVAC Installation Costs: $15,000
Installing a new HVAC system costs homeowners between $1,500 and $12,000. This cost is influenced by a number of variables, including the cooling area’s size, the system’s kind, the manufacturer, the number of additional zones, etc. The installation price may rise by $2,000 or more as a result of all these extra variables.
Soft Costs to Build a House
Costs that don’t immediately contribute to the building process are referred to as soft costs in the construction of homes. expenditures like permit fees, design expenditures, etc. are among them.
1. Cost of Buying and Prepping Land: $20,000 Per Acre
You must look for land to build your house on before you start construction. There are two land-related expenses you will have:
- Cost of purchasing land: The average cost per acre in the US is $17,165. The size and location of the house you want to build will affect the cost of the land.
- Cost of land preparation: Before you begin building, you must clear and level the site. The price of land preparation might range from $1,500 to $3,000.
» How Big is an Acre: Definition, Dimensions, and Facts (With Visual Examples).
Five Most Expensive States to Purchase Land
| no. | State | Avg. Cost Per Acre |
|---|---|---|
| 1. | New Jersey | $196,410 |
| 2. | Rhode Island | $133,730 |
| 3. | Connecticut | $128,824 |
| 4. | Massachusetts | $102,214 |
| 5. | Maryland | $75,429 |
Source: Zippia
To save money on land costs, you can purchase undeveloped land, but you may need to pay additional expenditures to prepare the area for building, such as levelling and filling.
Five Cheapest States to Purchase Land
| no. | State | Avg. Cost Per Acre |
|---|---|---|
| 1. | Wyoming | $1,558 |
| 2. | New Mexico | $1,931 |
| 3. | Nevada | $2,116 |
| 4 | South Dakota | $2,135 |
| 5. | Montana | $2,283 |
Source: Zippia
🤔 Is it cheaper to build a house if you already own land?
Yes. In most cases, building a house is cheaper if you own the land. You will incur only the cost of building the home. Plus, you can customize your home to your requirements!
» Land For Sale By Owner: Buy land to build a house near you.
2. $3000 for a Permit:
To build a new home in the US, contractors require a building permit. The process of building a house is authorised by construction or building permits. State laws frequently set varying fees for building licences for commercial and residential construction.
Counties assess building rules and permit prices based on factors like construction type, occupancy type, home size, and project scope.
The following are some licences you might require and an estimate of their cost:
- Building Permit: $1,000 to $2,000
- HVAC Permit: $250 to $400
- Plumbing Permit: $50 to $500
- Electrical Permit: $10 to $500
3. Home Interiors: $20,000
Furniture, gadgets, kitchenware, cutlery and toiletries are all things you’ll need before moving into your new house. Although they may seem affordable, the expenses can mount up rapidly.
Your preferences, the standard of the finishes, your location, and the outlet you order from will all affect the price. Spending at least $20,000 on interior decor is recommended for a 2,500 square foot property.
4. Home Interior Designer Costs: $5,400
You can employ an interior designer if you don’t enjoy doing it yourself. Before you choose the final finishes for your home, a professional interior designer will show you 3D views and renderings of how it will appear and feel.
In accordance with your preferences and functional needs, an interior designer will also order the appropriate furniture, wall art, rugs, carpets, and other items for your home. They can also assist you in making the best use of available space.
But interior designers aren’t cheap. Budget $5,400 on average, but it can be more or less depending upon your requirements.
House Building Financing Options
If you have the resources to finance your ideal home, you can skip this part. If not, hold onto your hope. Create a budget, obtain the necessary estimates for a home, and then submit an application for one of the following mortgages:
Home Construction Loans
There are two mortgages that exist solely for construction of new homes. A few of these include:
Construction-to-Loan for the Long Term: This loan will pay for both the land and the cost of constructing a new house. Once the building is completed and you move into the home, the financing transitions to a typical mortgage with a duration of 15 to 30 years.
Construction-only Loan: This loan is intended to be used to finance the construction of a home, not the acquisition of the land. The total loan amount becomes due once your home is ready. Either you make a cash payment or get a mortgage to cover the cost.
» Mortgage Lenders: Check out the best mortgage lending companies in the US.
Personal Loan
The costing of construction is not covered by a personal loan. You can get a personal loan to pay for a certain area of the building. For instance, when planning your home construction budget, you neglected to include landscaping costs. A personal loan might help you in these situations.
Home Equity Loan
In order to fund the building of a new home, homeowners who currently own one can use an equity loan. You may be able to finance all of your new home’s construction or just a portion of it, depending on how much equity you currently have in your old residence.
Cost to Build a House Near Me
Should You Build Your Own House?
We highly advise building a house yourself or employing a general contractor to build one for you if you own land in an area you desire to dwell. For planning and building your new home, allot nine to twelve months.
We advise you to look for turnkey homes and swiftly move in if you don’t own your own land in a suitable location.
Skip the hassle of building a house, and check out FSBO properties on Houzeo.com. Make offers, negotiate directly with homeowners, and move into your new home within a month.
» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is one of the best FSBO sites in America.
Frequently Asked Questions
1. In the USA, how much does it cost to construct a 2,000 square foot home?
In the USA, it costs around $100 to $155 per square foot on average to build a house. Building a 2,000 square foot would therefore cost between $200,000 and $310,000. Depending on the precise location, the type of property, labour expenses, material costs, etc., these costs will change.
2. If you own the land, how much does it cost to build a house?
If you already own the land where the house will be built, it will cost you between $112,000 to $460,000, with $285,675 as the national average.
3. What are the drawbacks of building a house?
Building a house has the following drawbacks:
1. From start to finish, a house takes 9 to 12 months to construct.
2. Usually, it costs more to build a home than it does to buy a new one.
3. There are a number of fees associated with building a home, all of which you must handle independently.
Resources for Buying a Home
If you think home building is a hassle, here are the resources to help you shop for a property.
- How to Buy a House: Learn about the process of buying a home in America.
- How to Buy a House With Bad Credit: Find out how to purchase a home even if you have bad credit.
- Best Time to Buy a House: To maximise your gains, read on to find out when to buy a house.
- Mortgage Brokers Near Me: Look into the top-rated mortgage brokers in your area.
Resources for Selling Your Owner-Built Home
Here are some resources you need to look into if you want to sell your house after building it in order to make the most money:
- List on MLS: Learn how to register your owner-built properties with the MLS.
- Free MLS Listing: Find out whether there are any free MLS listing options by reading this..
- Flat Fee MLS Listing: Take a look at how Houzeo’s FFM packages can help you avoid paying thousands in commissions.
- Real Estate Agents: Find out which real estate brokers are the best, ranked according to experience, negotiating abilities, and more.
- Online discount brokerages: Look at our list of the best US real estate brokers.
- Realtors: Find the best NAR-certified real estate agents to sell your owner-built home.
- How to Sell a House By Owner: Want to avoid paying the expensive real estate commissions? Check out our article about selling a house without a realtor.
- Cash Buyers for Homes: With America’s top cash homebuying firms, sell your property quickly for cash in 2023.
- Flat Fee Realtor: With Flat Fee Realtors, you can sell your house for a set price rather than paying a listing commission.
Also Read:
- Is Houzeo Legit? Let us Find out.
- Houzeo Complaints: Read everything about Houzeo.
- Houzeo Hidden Fees: Find out more about Houzeo’s Hidden fees Policy.
