How much does it cost to build a house?


    Finding a home that has everything you want and need can be difficult, especially in a tight market. You might consider building a house instead. But can you afford it

    The cost of building a home depends on a variety of factors including the size of the home, where it will be built, and whether you are building a home from scratch or buying a planned development.

    Finding out how much it usually costs to build a house can help decide if it is the right move for you.

    Cost of building a house

    When deciding whether to build a home, you need to figure out how much you can afford with your budget. Looking at the latest available data from national sources can give you an idea of ​​how much you might be paying. For example:

    The average price for new construction contracts Single family homes According to the 2019 Census Bureau, the price is $ 281,700. The contract price does not include the cost of land, landscaping, or design changes that may occur after the initial deal is closed.

    The National Association of Home Builders and HomeAdvisor report their data differently than the Census Bureau.

    The NAHB’s 2019 construction cost survey examines the various components that go into the price of a new home, based on responses from 49 builders. The NAHB found that construction averages over 61% of the price of $ 485,128 for a typical single-family home, or $ 296,652.

    At the time of this writing, HomeAdvisor states that the average cost to build a home is $ 302,194, based on project costs reported by more than 500 members. However, the home services company states that the price can range from $ 157,779 to $ 477,594.

    It is generally more expensive to build a house than to buy an existing one. The factors that have the greatest impact on the price of a home to build are the cost of labor, the location, and the level of luxury in your home.

    Nerdy tip: The estimates of the contract and construction costs may be lower than the final price. This can include additional costs unrelated to building a home, such as the cost of completing land, financing costs, marketing costs, and sales commissions.


    According to HomeAdvisor, hiring professionals to build your home may account for the bulk of the total construction cost, around 30% to 60%.

    Labor costs vary from country to country and depend on the size and complexity of your design. You can be burdened by the job, by the hour, or by the square foot. Some of the professionals you may need to hire include:

    • Architect or civil engineer.

    Location of your home

    The price of building a house depends on the cost of living, materials, and labor you plan to live in. The average contract price per square foot for a new single family home is $ 126.15, according to the Census Bureau. This is broken down by region:

    • West: $ 158.73 per square foot.

    • Northeast: $ 155.68 per square foot.

    • Midwest: $ 129.01 per square foot.

    • South: $ 110.19 per square foot.


    The size and layout of the home, as well as the types of products and finishes you use, will affect the price you pay to build a home.

    The new building allows you to adjust the house from top to bottom. However, upgrades can be expensive. Interior fittings, which include flooring, drywall and cabinet installations, can account for more than 25% of construction costs, according to the NAHB.

    Ways to Fund Your New Home

    When you buy a new home from a builder, you must sign a contract with them to build a home on a piece of land in a planned development. If you have to get a mortgageit can be available direct from the builder, and the process can be very similar to financing an existing home.

    On the other hand, building a house from scratch means buying land, hiring an architect to design the house, and then a contractor to build the house. If you cannot pay cash for the land and the design of the house, then you will need a construction loan.

    Construction loan financing

    Building loans are short term loans that finance the construction of a home. There are three different types of construction loans:

    • A construction-to-permanent loan pays off in the construction of your home. After the house is built it is converted into a permanent mortgage.

    • A home loan only covers the construction costs. It must be paid back in full when the building is finished, usually through a traditional mortgage.

    • A home renovation loan covers the cost of major renovations to a home. Once the building is completed, the cost of the renovation will be wrapped in the mortgage.

    Obtaining home loan approval can be more difficult compared to a typical purchase mortgage. Lenders consider them riskier because you cannot use the house as collateral as it has not yet been built.


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