How Much Does It Cost to Build a House?

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The average cost to build a house is $150,000 to $450,000.
Many people spend around $300,000. There are lots of things to think about before you build, like home type, hiring, materials and layout. All of these things affect your final price. Here’s a quick look at major cost factors:
- Type of House
- Size of House
- Size of Lot
- Location
- Materials
- Services
- Labor
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 (sectional) form or in panel form. They’re then shipped and put together on-site.
- Custom homes: $350,000 to more than $1,500,000
- Prefabricated / Modular homes: $50,000 to more than $300,000
Size of House
The size of the house you’re building has a big impact on price. When you take the average $300,000 cost to build a home and a typical home size of 2,000 square feet, the price comes to $150 per square foot. So, a home under 750 square feet might cost $112,500. And a home over 3,000 square feet might cost over $450,000. Other size factors include the number of stories and the shape of the home.
Size of Lot
The size of the lot affects building cost. Buying a larger lot is likely to cost more versus a smaller one in the same area. And a larger lot will require more preparation than a smaller one. According to the Angie’s List Pricing Guide, homeowners spend $1,000 to $4,000 to clear and prep land for home building.
Location
Location can greatly sway your cost. A lot in a cul-de-sac might cost more because of the minimal traffic. Lots near highly-rated schools might cost more than those near schools with low ratings. And the rate for work in your area might be more or less than the average. Here’s a sampling of how widely building costs vary from one area to another:
- Atlanta, Georgia - $100,000 to $400,000
- New York, New York - $150,000 to $550,000
- Live Oak, Florida - $250,000 to $350,000
- San Jose, California - $350,000 to $700,000
Materials and Services
Materials and services don’t only affect cost, they determine how long your home will last and how well it will hold up against harsh conditions. Your material costs will include large elements like the type of foundation, siding and roofing, as well as smaller ones like flooring, cabinetry and plumbing fixtures. And each material involves its own type of service, like framing work, foundation installation, finishing work and landscaping. An experienced home builder can help you choose the best materials and services for your budget and goals.
Labor
Labor costs will take up a large chunk of your budget, but it’s worth it to hire quality contractors for a project like this. Many home builders charge a percentage of the total project price for their own services. And labor costs are built into your services to cover things like preparing the lot, building, landscaping and cleaning.
For a closer look at what to expect from the cost of materials and labor, see these examples from the National Association of Home Builders (NAHB) 2017 Construction Cost Survey.
- Plumbing Fixtures 1.3%
- Insulation 2.2%
- Cabinets, Countertops 5.0%
- Exterior Wall Finish 6.5%
- Framing (including roof) 15%
Tips for Hiring Homebuilders
The homebuilder you hire makes all of the difference. Follow these hiring tips to avoid conflict and ensure a smooth experience:
1. Ask around. Get recommendations from people you know.
2. Research. Research your shortlist of homebuilders. Make sure they have a good reputation and the right insurance.
3. Review their work. Call references and review portfolios, and try to look at prior work in person.
4. Prioritize communication. Look for a pro who communicates clearly and in a way that works for you.
5. Listen to your instinct. If a pro is bidding very low, isn’t communicating clearly, or is asking for too much money upfront, you may want to consider other options.
What to Expect
If you’re careful to hire an experienced, quality professional, they can help you understand the homebuilding process and avoid the unexpected. Here are a few parts of the process to keep in mind:
- Buying the perfect lot
- Budgeting, designing and planning
- Getting permits, insurances and inspections (including the final inspection)
- Breaking ground, building and landscaping