✏️ 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.
On average, it costs $150 per square foot to build a house in the US. Apart from this, you need to bear other additional expenses. Construction charges depend on the type of property, square footage, and customizations you choose.
Typically, you would spend 9 months to build your house. In case you don’t hire a contractor and choose to DIY, it can go up to 12 months. To save time and money, you can browse and buy homes for sale instead.
💸 Home Building is Expensive
- Homeowners spend $480,000 in total to build a house in the US, which is $66,126 more than the median sale price.
- Expensive labor, supply chain issues, and a rise in material costs can further increase your expenses.
- In most cases, it is more affordable to buy a turnkey home and move in quickly.
Can You Build Your Own House?
Yes, you can build your own house, if you have land in an area of your choice. You have to budget for the time and the cost of building your home though. You will also need permits to build your house.
Permit fees depend on the home value or the construction area. Home building permit laws vary across counties. Refer to your local county’s website or office for more information.
Is it Cheaper to Build or Buy a House?
It is usually cheaper to buy a home than build a new one. However, by building your own home you get a brand-new residence, customized to your needs.
It costs $305,829 on average to build a home. This figure can add up to $480,000 if you include land costs, excavations, permits, and other expenses. A new home construction can take up to 9 to 12 months.
On the other hand, homes in the US cost a median of $435,051. You can also easily find homes for sale under 400k in 1.5 to 2 months. So, buying a turnkey home is not just cheaper but also faster.
How Much Does it Cost to Build a House?
The average cost per square foot to build a house is $150 sq. ft. This doesn’t include land costs, permit fees, excavations, and other costs.
Average Cost of Building a House
| Range | Building Cost |
|---|---|
| National Average Cost | $295,881 |
| Minimum (800 sq. ft.) | $120,000 |
| Maximum (5,000 sq. ft.) | $750,000 |
| Average Range | $110,000 - $480,000 |
Source: HomeAdvisor
Average Cost to Build a House Per the Number of Bedrooms
The table below shows the building costs based on the number of bedrooms:
| House Area Range | Number of Bedrooms | Average Cost |
|---|---|---|
| 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
The table below shows construction cost per square foot for different home sizes:
| Home Size | Average Price Range |
|---|---|
| 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
Average Home Building Costs by State
Below is the table showing the average cost to build a 2,500-square-foot house in each state:
Cost Breakdown of Building a House
To paint a better picture, here is a house building cost distribution for a 2,500 sq. ft. house:
Hard Costs of Building a Home
Hard costs comprise expenses directly involved in the home-building process.
1. Material Cost to Build a House: $125,000
Building materials make up approximately 50% of the overall construction prices. You can expect to spend about $50 per square foot on material costs.
The Chief Economist at Associated General Contractors of America, Ken Simonson, expects price hikes and shortages to ease for some products, and to remain volatile for others in 2023.
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%
You need a contractor or a firm to manage the construction process. A general contractor hires several other professionals involved in the home-building process. They include:
- Electricians
- Architects
- Floor installers
- Plumbers
- HVAC installers
- Carpenters, etc.
A contractor charges around 10% to 20% of the total construction value. The fee depends on several factors, such as property type, detailing, materials, and workforce. Apart from a contractor fee, ensure to account for each professional’s hourly rates.
The average hourly rates of home building professionals in the US are as follows:
| Professionals | Hourly Rate* |
| Flooring Installers | $20.61 |
| Roofers | $22.42 |
| Painters | $19.71 |
| Brick Masons | $24.94 |
| Landscapers | $17.93 |
| General Contractors | $24.61 |
| Plumbers | $27.33 |
| Carpenters | $23.41 |
| HVAC Technicians | $26.76 |
| Structural Engineers | $39.69 |
| Electricians | $27.48 |
3. Electrical Costs: $7,500 – $12,500
The electrical cost for new construction per square foot is $3 to $6. This amount includes both the rough-in as well as the finishing work.
The amount you spend on electrical work will differ depending on the property size, type of wiring, wire material, etc. Some electricians can charge up to $120 per hour.
4. Roof Installation Costs: $5,500 – $33,000
The cost of roofing depends on the type of material you select, the roof’s slope, and the size of your home. The table below displays home roofing prices per square foot for various materials:
| 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
Plumbing costs include installing plumbing fixtures such as toilets, faucets, wash basins, bathtubs, etc. Homeowners spend around $4.50 per sq. ft. in plumbing in new construction or $4,080 on average.
You require a plumber to fix the pipes and lay the sewage lines. You also need to install washing machines, dryers, and geysers while custom-building a home.
6. HVAC Installation Costs: $15,000
Homeowners pay $1,500 to $12,500 to install a new HVAC system. This cost can further vary as per the size of the cooling area, the type of system, the brand, etc. All these additional factors can increase the HVAC installation cost by $2,000 or more.
Soft Costs to Build a House
Soft costs in home construction contribute to the building process indirectly. They include costs like land costs, permit costs, design costs, etc.
1. Cost of Buying and Prepping Land: $17,000 Per Acre
Before you build your house you need to shop for land to build it on. You will incur two costs related to land:
- Land Purchase Cost: The average price per acre in the United States is $14,038. The cost of land depends on the size of the house you wish to build as well as the location.
- Preparation Cost: You need to clear the land and level it before starting the construction process. Land preparation costs can be anywhere between $1,500 – $3,000.
Five Most Expensive States to Purchase Land
| # | 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
You can buy undeveloped land to save land costs but you might have to incur other expenses like leveling, filling, etc. to make the land construction-ready.
Five Cheapest States to Purchase Land
| # | 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!
2. Permit Costs: $3,000
In the U.S. contractors need a building permit to construct a new house. Construction or building permits are legal documents that authorize the house-building process. State laws often have different charges for commercial and residential building permits.
The permit costs, and building codes, vary per county and are usually charged based on the construction type, occupancy type, home building area, and project scope.
Some permits you may need along with their average cost are as follows:
- Building Permit: $1,000 to $2,000
- HVAC Permit: $250 to $400
- Plumbing Permit: $50 to $500
- Electrical Permit: $10 to $500
Read state-specific articles on the cost of building a new home for more information on building permits.
3. Home Interiors: $20,000
Before you move into your new home, you’ll need furniture, electronics, utensils, silverware, and bathroom essentials.
The costs will depend upon your taste, quality of finishes, location, and the outlet you order from. For a 2,500 sq. ft. home, you should budget at least $20,000 on interior furnishings.
4. Home Interior Designer Costs: $5,400
If designing your own home interior isn’t your thing, you can hire an interior designer. A great interior designer will provide you with 3D views and renderings of your home.
An interior designer will also order the right furniture, wall prints, rugs, etc. based on your taste and requirements. They can also help you maximize space utilization.
The cost of an interior designer isn’t cheap. You can budget $5,400; it can be more or less depending on your requirements.
House Building Financing Options
Here are the typical home-building financing options available for you:
Home Construction Loans
The two most prominent home construction loans are:
- Construction-to-Permanent Loan: This loan covers land purchases and home-building costs. It is converted to a conventional mortgage after the construction is complete and you move into the house.
- Construction-only Loan: It only covers the cost of home building. After your home is ready, the entire loan amount is due. You can pay back the loan in cash or take out a mortgage.
Personal Loan
A personal loan will not cover your entire home-building cost. You can opt for a personal loan to finance a specific part of the construction. For example, you can finance landscaping through a personal loan.
Home Equity Loan
A home equity loan applies to homeowners who already have a property and want to finance new construction. Depending on how much equity you own in your existing home, you can finance the entire construction of your new home or a part of it.
» Property Value Estimator: Find your home’s value within a minute.
Should You Build Your Own House?
You can build a house yourself or hire a general contractor if you own land in a location you want to live in. You can budget 9 to 12 months to plan and construct your new home.
However, if you don’t own land, we recommend you house-hunt for turnkey homes and move in quickly.
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» Need More Clarity? Read these exclusive Houzeo reviews and learn why the platform is the best in America’s competitive housing market.
Frequently Asked Questions
1. How much does it cost to build a 2,000 square foot home in USA?
The average cost to build a house per square foot in the USA is about $100 to $155. So, you would have to spend around $200,000 to $310,000 to build a 2,000-square-foot. These costs will vary depending on the exact location, property types, labor costs, material costs, etc.
2. How much is the cost to build a house if you already own the land?
The cost to build a house if you already own the land is between $110,000 to $480,000, with $295,881 as the national average.
3. Is it really expensive to build a house?
The average home building cost in the US is $295,881. However, this can go up to millions depending upon the property size, type, and how much you spend on the individual components.
4. What are the disadvantages of building a house?
The following are the disadvantages of building a house:
1. It takes 9 to 12 months to build a house from scratch.
2. In most cases, building a home is more expensive than buying a new one.
3. The home-building costs have several components, and you have to manage them on your own.
5. What costs the most when building a house?
Framing costs the most when building a house. A high-quality lumber framing can cost up to $33,000.
6. What kind of loan do I need to build a house?
You can opt for the following loans to build a house:
1. Home construction loans
2. Personal loans
3. Home equity loans
» Construction Loans: Everthing You Need to Know
7. What is the cheapest type of house to build per square foot?
A ranch house is the cheapest to build. It costs about $150 per square foot to build a ranch house in the US.
8. How much does it cost to buy land and build a house?
The average cost to price a house in the US is $295,881, excluding the land cost. And the average land purchase price stands at 10,871 square feet. So, depending on the land size and the home size, you can spend anywhere between $110,000 and $480,000. This amount can reach millions in some cases.
