You may be more than surprised by the price of a home in the current market. If you want to invest in your future, consider building a new home (and list it with MyState MLS when you’re ready to sell). That way, you can customize your house to suit your needs, the size of your family, and any fixtures or features you desire.
When you consider building a home from the ground up, you may assume it will be more expensive. Although it’s a large amount of money upfront, there is no need to worry about maintenance, repairs, or upkeep. Another benefit is that your home will be newer and, therefore, less likely to have issues and maintenance that older homes often require. Pair those reasons with the fact that newer homes often sell for more (often faster, too), and building almost looks like a no-brainer over buying.
What is the cost of building a house in 2023?
According to several sources and studies, the average national cost of a new house is between $114,256 and $488,983. This cost does not apply to all single-family houses or new homes in the U.S., but it gives you a decent idea of what you’re getting into.
Remember, the total cost of building a new home is influenced by factors like location, square footage, the products or materials you choose, and local labor costs. Builders are also seeing prices for lumber and materials rise, which they then pass on to consumers.
8 Home Building Cost Estimates
Below is an overview of the costs involved in building a new house (we skipped landscaping because it’s in a class of its own). You can get an idea of the costs by contacting home builders or developers. Here are some main costs that you should include in your budget for home construction:
- Land Or Lot
- Home Design & Permits
- Size Of The Square Footage
- Lumber Prices
- Interior Finishes
- Exterior Finishes
- Plumbing, HVAC & Electrical
- Costs of labor
A Piece Of Land Or A Lot Costs Between $3,000 to $250k
Before you build anything, you will have to find and secure a lot or land to build on. This alone can have a significant impact on your overall costs, and it is what often drives up real estate prices. The cost of clearing land for the foundation is also a factor.
The price of a rural area will likely be higher than a location near a good district school or close to a large city. The ease of building is another factor to consider. The flatter your land and the easier it is to build on, the cheaper the labor and preparation will be. Prepping can cost anywhere from $1,300 up to $5,100.
Once you consider all the factors, prices can vary dramatically. Estimates say that average lots can cost between $3,000 and $250,000. The lower end figure would be a lot that is underdeveloped in rural areas and may require clearing.
You can expect to pay between $50,000 and $100,000 for housing development lots. The price of a lot depends on its size, location, and whether utilities such as water, sewer, and electricity are present or not.
Permits and Home Designs: from $500 to $20k
The cost of home design and building permits can be anywhere between 10% and 25% of the total construction costs. Depending on how simple or complex your design is, you can expect to pay between $500 and $20,000 for a house plan. You can expect to pay $50-$250 an hour for the services of a design professional. The cost of a permit will vary depending on the location but is usually between $1,200 and $2,000.
Overall cost per square foot: from $120 – $500
You shouldn’t be surprised that the more construction you do, the higher the cost. The price can vary greatly depending on the materials, which could be anywhere between $120 and $400 per square foot. For custom-built homes, the cost can jump to between $200 and $500 per square foot.
It’s true building a house is indeed more expensive today, but you still get value for money. You might have been able to build your dream house for a certain price per square foot about a year ago, but it’s likely to cost more today. Here are some examples of breakdowns by square footage.
Lumber prices: from $25k to $60k
If you’re building a home, you can expect to spend anywhere between $25,000-$65,000. However, lumber prices could rise due to supply and demand factors such as wildfires, delays in distribution, or infestations. Remember that outside factors can increase the cost of lumber and other building materials.
Interior Finishes: from $50k to $100k
Interior finishes are usually less expensive than exterior finishes unless they’re high-end and customized, which cost more. Interior finishes will probably cost you between 25% and 33% of the budget. You can choose to reduce the cost by changing the design or materials, provided it does not compromise the safety and durability of the foundation.
Here are some examples of how much it might cost to finish a specific interior space.
- Price range for appliances: $3,000 – $15,000
- Cost of installing a countertop: $2,200 to $4350
- Custom cabinet price: $2000-$30,000
- Drywall installation price: $5,000 – $30,000
- Installation fee for fireplaces: $1000 to $10,000
- Installation price for flooring: $10,000 – $35,000
- Cost of installing interior doors: $5,001 to $20,000.
- Interior painting price: $4000 to $11,000
- Lighting fixture cost: $2,000 – $12,000
Exterior Finishes: $40k to $60k
Exterior finishes include exterior walls, exterior painting, concrete, drainage systems, drywall, and windows. It is estimated that this will take up 60% of the total cost. Although this is a large portion of your home building costs, there are ways to get the look you desire at a lower cost if your estimate is just outside of your budget.
These are some estimations for the most common exterior finishes.
- Cost of painting the exterior of a house: $1,800 – $4,400
- Roof installation costs: from $5,700 up to $12,000.
- Cost of window installation: $3,000 – $9,600
Costs For Plumbing, Electrical & HVAC: $30k to $75k
You can expect to spend between $30,000 and $75,000 on the installation of plumbing, electrical, and HVAC systems for your new home. You’ll need to use the best materials and hire the right installers to ensure that these systems are installed correctly. It’s not worth tinkering with faulty electrical outlets or plumbing from poor installation.
- Cost of electrical wiring: $20,000 to $30,000
- HVAC: $1,500 – $13,000
- Costs of rough-in plumbing: $7500 to $15,000.
- Price of solar panels: between $18,000 and $35,000
The Labor Costs of Your Project: 30 to 50 percent
Labor costs will make up a large part of your budget for building a house. There are many different moving parts between technicians and independent contractors. Plan to spend at least 40% or 50% of your budget on labor.
These are some examples of how to estimate labor costs.
- Cost of architects: $125 – $250 per hour
- Construction (project) manager cost: 5% – 15% of total project costs
- Electrician rates: $50-$100 per hour
- Cost of general contractor: 10 to 20 percent of total project costs
- House framer rate: $7 – $16 per sq. foot where framing is needed
- Rates for interior designers: $50-$200 per hour
- Landscape architect fees: $75 to $150 per hour
- Plumber costs: $45-$200 per hour
- Cost of structural engineers: $100-200 per hour
So, Does it Make Sense to Build Your Own House?
According to the National Association of Home Builders and building experts, you should always leave more room in your budget than expected. Unexpected costs can be a costly mistake.
Remember that any project’s timeline and cost estimates are subject to change. Be flexible and pivot when you can. Another option to consider may be manufactured housing on a lot or piece of land to start. That said, if you can afford it, build it!
