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How Much Does It Cost to Build a House in Detroit, MI? [2025 Data]
Normal Range: $194,500 - $341,666
The average cost to build a house in Detroit, MI, is $243,555, and most projects total between $194,500 and $341,666. A pro will factor in location, material quality, home size, and more.
How we get this data
Amy Walters / Adobe Stock Photography
Amy Walters / Adobe Stock Photography
Cost Insights
Building a new custom home in Detroit is generally less expensive compared to most other major cities.
With Detroit lacking a city-specific sales tax, the flat state sales tax rate of 6% in Michigan can lower the cost of building materials compared to other major cities that have state, county, and city sales tax rates.
The initial stage of digging a foundation in Detroit can be longer and costlier compared to places where basement foundations aren't standard.
With the average cost to build a house in Detroit at $243,555, locals are paying much less than the national average for new builds. However, the cost can range from $194,500 to $341,666 based on a home's size, the finishes chosen, and other factors. Read on to learn more about the costs that go into building a custom home in Detroit, Michigan.
Home Building Cost Factors
Your builder will meet with you to discuss the features you want to prioritize while staying within budget. Generally, new homes are priced by square foot. With basements being standard in Detroit, the initial cost of starting with a foundation can be higher here compared to cities where inexpensive slab foundations are more common. In addition, adding a basement can impact how long it takes to build a custom home.
Square Footage
The cost to build a custom home can range anywhere from $100 to $500 per square foot, with the average sitting right around $150 per square foot. The higher end of this range accounts for building luxury homes or homes in large cities. The size and type of house you choose will also affect what you’ll pay.
| House Size in Sq. Ft. | Price per Sq. Ft. | Average Total Cost |
|---|---|---|
| 1,000 | $100–$450 | $100,000–$450,000 |
| 1,500 | $100–$450 | $150,000–$675,000 |
| 2,000 | $100–$450 | $200,000–$900,000 |
| 2,500 | $100–$450 | $250,000–$1,125,000 |
| 3,000 | $100–$450 | $300,000–$1,350,000 |
| 3,500 | $100–$450 | $350,000–$1,575,000 |
Number of Bedrooms
It’s helpful to have an idea of the total construction cost based on the number of bedrooms, since that will likely be the first thing you decide. You can expect to pay $100,000 to $120,000 per bedroom. Note that the added cost comes from not only the additional square footage for the bedroom but also larger living spaces, additional bathrooms, and utilities to support additional occupants. The average home in the U.S. today is 2,200 to 2,500 square feet and has three bedrooms.
Here are the new construction home costs based on the number of bedrooms at the average price of $150 per square foot.
| Number of Bedrooms | Average Median Cost |
|---|---|
| 2 | $110,000–$215,000 |
| 3 | $150,000–$220,000 |
| 4 | $245,000–$370,000 |
| 5 | $390,000–$400,000 |
Foundation Type
The cost of your foundation will come down to where you live, the soil conditions, and the type of foundation that’s best for your home.
Unless you’re well-versed in construction, you’ll probably want to lean on a structural engineer to help you determine the correct foundation type and inspect the foundation after its completion.
| Foundation Type | Cost per Sq. Ft. | Pros | Cons |
|---|---|---|---|
| Basement | $10–$35 | Increased living space and storm shelter | Higher cost, longer initial construction phase |
| Slab-on-grade | $3–$14 | Faster, less expensive | Pipe access becomes difficult |
| Pier-on-beam | $7–$12 | Flood resistance and easy access to pipes/utilities | Increased risk for wood rot |
| Crawl space | $3–$9 | Added flood protection, enhanced accessibility for pipes | Increased risks for moisture intrusion and pests |
Exterior Finishes
Exterior finishes, from the siding to the shingles on your roof, will account for $25,000 to $60,000 of your overall home-building costs. You and your team will have a lot of decisions to make depending on the exterior style you’re going for and the best options for your local climate, among other factors. Things like high-end roofing materials and gutters will increase your cost but also provide a greater ROI.
| Exterior Finish | Average Cost per Sq. Ft. |
|---|---|
| Roofing | $4–$11 |
| Siding | $5–$30 |
| Gutters | $3–$33 per linear foot |
| Exterior trim | $10–$21 per linear foot |
| Stucco | $5–$9 |
Interior Finishes
Moving on to the interior work of your home is an exciting phase. This stage is the moment to determine the flooring, the paint colors, and all appliances and home systems that make your house a home. Assume you'll pay between $50,000 and $175,000 for all interior finishes.
The higher cost range accounts for more complex and sought-after materials. These include everything from insulation with higher R-values to beautiful marble countertops. Nearly every category, however, offers options for all budget preferences.
| Interior Finish | Average Cost per Sq. Ft. |
|---|---|
| Countertops | $4–$11 |
| Painting | $3–$6 |
| Flooring | $2–$17 |
| Interior doors | $55–$350 each |
| Interior trim | $1–$2.25 per linear foot |
Home Building Pro Costs
When you hire a custom home builder in Detroit, Michigan, you'll be able to lean on the expertise of a pro who understands how the city's permitting process works. In addition, builders and general contractors handle all of the hiring, coordination, and payment of subcontractors needed for things like plumbing and electrical in most situations.
Permits
Before breaking ground, your contractor will submit a building plan to the city's Buildings, Safety Engineering, and Environmental Department (BSEED). Once approved, you can move into the building phase. Permit costs for new homes in Detroit are based on the project's value. For homes valued up to $500,000, the base permit cost is $150. For homes between $500,000 and $1 million, the permit fee rises to $10,110.
Taxes
Sales tax will apply to all building materials needed for a new home build in Detroit. While homeowners do save based on the fact that Detroit is not subject to any city or county taxes, the flat Michigan sales tax rate of 6% applies.
Licensing, Certification, and Insurance
In order to act as a home contractor in Detroit, a professional must have a current Michigan Residential Builder license issued by the Michigan Department of Licensing and Regulatory Affairs (LARA). For Detroit pros, becoming licensed involves significant time and monetary costs. In addition to completing a 60-hour pre-licensure education course and passing an examination, pros pay close to $300 in licensing fees. In addition, a sole contractor might pay between $100 and $200 per month for insurance and bonding.
Is Building a New House Worth It?
Detroit's recent turnaround from a population decline to an increase makes taking advantage of below-average building costs an attractive choice for a good return on investment (ROI). However, anyone thinking of investing in a new build in Detroit should keep in mind that the market climb is slower and steadier compared to cities with rapidly increasing home values.
How Angi Gets Its Cost Data
Home is the most important place on earth, which is why Angi has helped more than 150 million homeowners transform their houses into homes they adore. To help homeowners with their next project, Angi provides readers with the most accurate cost data and upholds strict editorial standards. We’ve surveyed thousands of real Angi customers about their project costs to develop the pricing data you see, so you can make the best decisions for you and your home. We pair this data with research from reputable sources, including the U.S. Bureau of Labor Statistics, academic journals, market studies, and interviews with industry experts—all to ensure our prices reflect real-world projects.
Want to help us improve our cost data? Send us a recent project quote to [email protected]. Quotes and personal information will not be shared publicly.
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