The average home building cost in 2023 will range between $112,000 and $460,000. Depending on your choice of style and area, home building costs can reach millions. Also, on average, homeowners spend 9 to 12 months building a home.
Is building your own home really worth the cost and time? Or should you buy a new house?
Can You Build Your Own House?
Yes! If you have an ideal piece of land, in an area you want to live in, you can definitely build your own house. You have to budget for the time and the cost of building a house though.
You will also need permits to build. Permit fees depend on the home value or the construction area. Rarely will the permit be charged at a flat fee. Permit laws and costs vary across counties. Refer to your local county’s website or office for more information on home building permits.
» Permit Costs: Read more about home building permits.
Is it Cheaper to Build or Buy a House?
Generally, buying an existing home is cheaper than building a new one. But remember, by building your own home you get a brand-new home, customized to your needs.
The cost of house building in the US ranges between $112,000 to $460,000, with the national average at $285,675. This figure does not include land costs, excavations, permits, and other expenses. Home building prices can reach millions depending on the build type and customizations.
If you’re considering buying a home, the median sale price (as of Dec 2022) is $388,310.
Owner-built homes can take up to 12 months to complete. Even if you hire a contractor, you will spend 9 months building your house. So, new home construction is not only expensive but also time-consuming.
» Homes For Sale By Owner: Shop FSBO homes directly from the homeowners.
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 | 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 above-mentioned numbers are average figures and can go up or down depending on several factors like type, size, labor demand, material costs, 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:
| 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
Below is the table showing home building costs by square footage:
| 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:
✍️ Pro Tip: Use online cost to build a house calculator to know the exact home building estimates.
Home Building Costs Breakdown
To paint a better picture, here is a house building costs breakdown for a 2,500 sq. ft. house:
Hard Costs of Building a Home
Hard costs comprise expenses directly involved in the home-building process that play a direct role in estimating the project’s completion.
1. Material Cost to Build a House: $125,000
Building materials make up approximately 50% of the overall building prices. You can expect to spend about $50 per square foot on home-building material costs.
The cost of building materials went up 5% to 10% in 2022 compared to 2021. This was due to the increased demand for siding and other building materials and longer delivery timelines.
Home building prices are expected to be volatile in 2023. Ken Simonson, Chief Economist at Associated General Contractors of America, expects price hikes and shortages to ease for some products, and to remain volatile for others in 2023.
“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%
You need a contractor or a firm to oversee the construction process. Contractors hire other professionals, estimate the costs, and complete the construction on time.
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. A general contractor’s 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.
3. Electrical Costs: $7,500 – $12,500
On average new construction electrical cost per square foot is $3 to $5. 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. To save money you can DIY the electrical work, but you will still need an electrician to check the connections. Some electricians can charge up to $120 per hour.
4. Roof Installation Costs: $5,500 – $33,000
Roofing costs depend on the choice of roofing material, the slope, and the size of your house. The table below shows roofing costs 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. for installing plumbing fixtures in new construction.
You require a plumber to fix the pipes and lay sewage lines. Apart from that, you need to install new pieces of machinery like washing machines, dryers, and geysers while custom building a home.
6. HVAC Installation Costs: $15,000
Homeowners pay $1,500 to $12,500 for installing a new HVAC system. This cost depends on several factors such as the size of the cooling area, the type of system, the brand, the addition of zones, etc. All these additional factors can increase the installation cost by $2,000 or more.
Soft Costs to Build a House
Soft cost in home construction comprises costs that do not contribute to the building process directly. They include costs like permit fees, design costs, etc.
1. Cost of Buying and Prepping Land: $20,000 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 $17,165. 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.
» How Big is an Acre: Definition, Dimensions, and Facts (With Visual Examples).
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!
» Land For Sale By Owner: Buy land to build a house near you.
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 follow:
- 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. These may sound relatively cheap, but the costs can add up quickly.
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 interior isn’t your thing, you can hire an interior designer. A great interior designer will provide you with 3D views and renderings of how your home will look and feel before you finalize the finishes.
An interior designer will also order the right furniture, wall prints, rugs, carpets, artifacts, etc. based on your taste and functional requirements. They can also help you maximize space utilization.
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 funds to finance your dream house, you are welcome to skip this section. If not, then do not lose hope. Prepare a budget and get the required estimate to build a house, then apply for one of the following home loans:
Home Construction Loans
There are two home loans specifically designed for home-building purposes. These include:
- Construction-to-Permanent Loan: This loan covers both land purchasing and the price to build a new home. Once the construction is complete and you move into the house, the loan is converted to a traditional mortgage of 15 to 30 years.
- Construction-only Loan: It is meant only for financing the home construction and does not cover the land purchase. After your home is ready, the entire loan amount is due. You either cover the amount by paying in cash or taking out a mortgage.
» Mortgage Lenders: Check out the best mortgage lending companies in the US.
Personal Loan
A personal loan will not cover the entire cost of building a home. You can take out a personal loan to finance a specific part of the construction. For example, you forgot to account for landscaping while budgeting your home-building finances. In such cases, a personal loan can come to your rescue.
Home Equity Loan
Equity loan applies to homeowners who already have a home and want to finance the construction of a new one. 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.
Cost to Build a Home Near Me
Click on your state to know home construction costs per square foot in your area:
Should You Build Your Own House?
If you own land in a location you want to live in, we highly recommend building a house yourself or hiring a General Contractor to build you one. Budget 9 to 12 months for planning and construction of your new home.
If you don’t own your own land in a desirable area, we recommend you house-hunt for turnkey homes and move in quickly.
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.
Eager to Know How Houzeo Works?
We’ve got you covered. Check out the following video to understand how Houzeo works and why it is one of the best For Sale By Owner websites in the U.S.
» 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. 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 $112,000 to $460,000, with $285,675 as the national average.
3. Is it really expensive to build a house?
The average home building cost in the US is $285,675. 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 $285,787, 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 $112,000 and $460,000. This amount can reach millions in some cases.
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: Discover how home buying works in America.
- How to Buy a House With Bad Credit: Learn how to buy a house without a good credit score.
- Best Time to Buy a House: Read to know when is the best time to buy a house to maximize your profits.
- Mortgage Brokers Near Me: Check out the top-ranking mortgage brokers near you.
Resources for Selling Your Owner-Built Home
If you plan on selling your house post building it, here are the resources you must check out to maximize your profits:
- List on MLS: Discover ways to list your owner-built homes on the MLS.
- Free MLS Listing: Read to know if there are ways to list on the MLS for free.
- Flat Fee MLS Listing: Check out how Houzeo’s FFM packages will save you thousands in commissions.
- Real Estate Agents: Discover the top real estate agents ranked on the basis of experience, negotiation skills, and more.
- Real Estate Brokers: Check out our rankings of top real estate brokers in the US.
- Realtors: Discover the top NAR-certified real estate professionals to sell your owner-built house.
- How to Sell a House By Owner: Want to skip the hefty real estate commissions? Read our guide on how to sell your house without a realtor.
- Cash Buyers for Homes: Sell your house fast for cash with America’s best cash home-buying companies in 2023
- Flat Fee Realtor: Skip the listing commission and pay a flat fee to successfully sell your home with Flat Fee Realtors.
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