How Much Does It Cost to Build a House?

Margaret Wack
Written by Margaret Wack
Reviewed by Robert Tschudi
Updated January 26, 2022
A construction site on the exterior of a house
Photo: Amy Walters / Adobe Stock

The typical cost to build a house is $123,000 to $451,000

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Buying a home is a dream for many, but building your own house is another option if you want to put your own personalized stamp on a forever home. The average cost to build a house is approximately $287,000, but costs can vary widely depending on the size of your home, your location, and the materials you use.

How Much Does It Cost to Build a House by Square Foot?

A house can cost anywhere from $100 to $500 per square foot to build. The cost varies widely depending on the size and type of house you choose. Labor accounts for about 40% of the cost, while materials account for the other 60%.

Keep in mind that the prices listed here are accurate as of the publish date, but pandemic-related supply shortages continue to cause price fluctuations. 

How Much Does It Cost to Build a House Near You?

The cost to build a house varies widely by area. Here are some average costs to build a house in cities around the country:

  • Boston, MA: $433,000

  • Santa Fe, NM: $351,000

  • Houston, TX: $343,000

  • New York, NY: $290,000

  • Chicago, IL: $459,000

  • Los Angeles, CA: $287,000

  • Nashville, TN: $167,000

  • Dallas, TX: $321,000

  • Atlanta, GA: $132,000

  • Miami, FL: $654,000

How Much House Can I Get on My Budget?

Your budget will help to determine what size and type of house you can build. The larger your budget is, the more square footage you can afford. You may also be able to build your house in a more expensive area of the country.

$150,000

$150,000 is on the low end for a budget to build your own house, but it’s still possible to afford a 300 to 1,500 square feet home. You may want to consider building in a less expensive area to make your budget stretch further.

$250,000

$250,000 is near the average when it comes to the cost of building your own house. You’ll be able to afford a house of roughly 500 to 2,500 square feet.

$350,000

With a budget of $350,000, you can build a larger house or one in a more expensive area. Depending on what type of house you design, you may also afford additional features like luxury appliances.

$450,000

A budget of $450,000 is near the high end of the cost to build a house, although the cost for some luxury houses can stretch to millions of dollars. You’ll likely be able to afford high-end additions and accessories for your home.

“We recommend to clients that they build with future goals in mind,” says Bob Tschudi, Angi Expert Review Board member general contractor in Raleigh, NC. “Adding an unfinished basement and/or an unfinished walk-up attic will increase the budget but save huge amounts of money down the road when the homeowner has the funds to finish those areas off.”

How Much Does It Cost to Build a House Yourself?

It can cost anywhere from $8,000 to $820,000 or more to build your own house. But again, the cost varies widely depending on your home’s size and location. Building materials alone cost around $50 to $60 per square foot, but this doesn’t include renting special equipment. However, building your own home isn’t a task to be taken lightly.

Not only will you need to build the home’s structure, but you’ll also need to complete tasks like installing electricity, HVAC, and plumbing systems. Working with a builder to construct your dream home is a safer bet once you consider the skills and knowledge required to complete this project properly. If you’re interested in building your own house, you should contact a custom home builder near you to discuss your options.

House Cost Breakdown

The main two costs when it comes to building your own house are materials and labor.

Materials

Overall, materials account for at least 60% of the cost to build a house. Materials and services not only affect cost, but they also determine how long your home will last and how well it will hold up against harsh conditions. An experienced home builder can help you choose the best materials and services for your budget and goals.

  • Land & Site Work: 3%–8%

  • Foundation: 10%–15%

  • Framing: 10%–20%

  • Exterior Work: 15%–20%

  • Major Systems (electric, HVAC): 10%–15%

  • Interior Finishes (drywall, floors): 25%–35%

Labor

Labor accounts for the additional 40% when it comes to the cost of building a house, but it’s worth it to hire qualified contractors for a project like this. Labor costs are built into your services to cover things like preparing the lot, building, landscaping, and cleaning. Many home builders charge a percentage of the total project price for their services.

What Factors Influence the Cost to Build a House?

An elegant stairway leading to the upper floor
Photo: coralimages / Adobe Stock

The cost to build a house will depend on your house size, location, and lot size.

House Size

The size of the house you’re building has a significant impact on price. Cost averages to construct a 2,000 square foot home shakes down to about $150 per square foot. A house under 750 square feet might cost $112,500, while a house over 3,000 square feet could reach $450,000 or more. Other size factors include the number of stories and the shape of the home.

House Location

A lot in a quiet, traffic-free cul-de-sac could bump up your numbers just as a lot in a highly-rated school district would. Construction rates will also vary according to the region and whether you’re building in an urban or rural area.

Lot Size

Buying—and preparing—a larger lot is likely to cost more versus a smaller one in the same area. Homeowners typically spend $1,000 to $4,000 to clear and prep land for home building.

Type of House

The two most common home types are custom and prefabricated (prefab). Custom homes are built from scratch on-site. Prefab homes are built in pieces offsite, either in modular form or in panel form. They’re then shipped and put together on-site. There are some restrictions on modular homes in some HOA communities, so be sure to check with them first.

  • Custom homes: $350,000–$1,500,000 or more

  • Prefabricated homes: $50,000–$300,000 or more

Building Permits

You’ll also need to secure building permits before you begin construction on your home. These permits typically cost between $1,200 and $2,000. Costs can vary depending on the state, country, and city or town that you live in. In most cases, contractors typically obtain building permits themselves.

FAQs about Building a House

Should I buy or build a house?

Buying or building a house is a personal decision. Some buyers may prefer the ease and convenience of purchasing a home that’s in ready-to-move-in condition, while others want to be able to put their own stamp on a home and customize it exactly to meet their vision. 

The average home purchase price in 2021 is $287,000, but costs can vary widely depending on the location and size of the home.

What mistakes should I avoid when building a new home?

Some common mistakes to avoid when building a new home include choosing a poor location, cutting corners on your budget, and working with builders that aren’t a good fit for you. You can help to circumvent any problems by hiring a reputable general contractor and working with a team of experienced home builders near you.

How can I stretch my budget when building a new home?

If you’re building a new home, you may be wondering where to spend and where to save to get the most bang for your buck. You may be able to save by waiting on areas that don’t need to be finished right away, like your basement. You should also shop around for the best deals when it comes to accessories like appliances and light fixtures.

“On a project we worked on, the budget increased because of several unforeseen circumstances,” Tschudi says. “So we gave the homeowners the choice of increasing the budget or cutting back on things that could be added later. They decided to delay the rear deck until a later time, and it enabled them to finish the project on budget.”

On the other hand, there are some areas where you shouldn’t cut costs. Investing in quality insulation can help you save money down the line by increasing your home’s energy efficiency. Similarly, customizing rooms like bathrooms and kitchens to meet your specifications is cheaper during construction and can help increase your home’s value.

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