Construction worker surveying build site.

How Much Does It Cost To Build A House?

Miranda Crace9-Minute Read
March 28, 2022

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There are an endless number of considerations to make when buying a home. In a seller’s market in particular, buyers can easily become frustrated with the stiff competition or if the available inventory doesn’t exactly align with what they had in mind for their dream home. These frustrations can even leave buyers wondering if they should buy a home in the first place.

If these frustrations sound familiar, then having a new home built may be a better option for your situation. Building your own home means you have full control over every aspect that goes into it, but that freedom isn’t free. How much does it cost to build a house? Keep reading for an in-depth look at building costs.

Average Cost To Build A House

According to HomeAdvisor.com, the average cost to build a house in 2022 is somewhere between $112,00 and $450,000, with a national average cost of $281,220. That works out to about $100 – $200 per square foot. In 2022, material prices are expected to fluctuate due to higher demand and manufacturing delays.

HomeAdvisor also has a calculator to help you estimate home building costs in your area.

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Home Building Cost Breakdown

While the total might give you some sticker shock, seeing what goes into home building may make it easier to digest.

Keep in mind that these are all average ranges. You’ll likely find at least a few of these project-cost areas are more or less than projected. You can compare quotes specifically in your area online today with HomeAdvisor by entering your ZIP code.

Item

Cost

Land and Site Work

$5,000 – $38,000

Foundation

$16,000 – $72,000

Framing

$16,000 – $95,000

Exterior Finishes

$20,000 –$95,000

Major Systems

$17,000 – $72,000

Interior Finishes

$50,000 – $175,000

 

Land

To build a house, you’ll first have to purchase a vacant lot to put it on. Land cost depends on a lot of different factors – size and location being the main ones – so the price could range anywhere from a few thousand to $100,000 or more.

Site Work

Your land will likely need to be cleared and prepared to build on, which can cost $1,500 – $5,000. If an existing structure needs razing or any ruins need hauling away, this cost most likely will be considerably higher.

If it isn’t already, the lot you choose will need to be hooked up to utilities. The cost of this will depend on your proximity to utility hookups as well as the city or town you reside in, as every area has different prices for these services. The total could cost anywhere from a few thousand to tens of thousands of dollars.

Additionally, if you aren’t able to connect to city water or sewer systems, you’ll need a well – the cost of which can range between $1,500 and $12,000 – and a septic tank, which can cost between $3,000 and $10,000.

To get a good estimate of how much this all will cost you, find out what services you’ll likely need. Then, do some research and get quotes for the land you plan to build on.

Floorplans

If you have an idea of certain elements that you want but aren’t quite sure how to put it all together, or if you’re planning on building a large or complex home, it may make sense to hire an architect to help you create a blueprint for your future home.

Hiring an architect will cost, on average, $5,000.

However, if you’re pretty clear on your vision for your home or just want something simple, you may be able to work with a draftsperson instead, which tends to be less expensive – around $1,700 on average.

Working with someone who has a lot of experience and understands your dream can be a worthy investment. Having all the details and being confident in your design before breaking ground can save you from having to make a change order – a request to alter something in the predetermined plans – in the middle of the project, which can be expensive.

Foundation

Three of the most common types of home foundations are concrete slab, crawl space and basement foundations. Slab tends to be the cheapest option, followed by crawl space and then basement.

Slab is pretty much what it sounds like: a slab of concrete that your house rests on. A crawl space foundation lifts the home a few feet off the ground leaving room to crawl underneath the house. Basement foundations add room to your home, and as such are more expensive to build.

On average, building a foundation will cost around $8,352, with prices varying depending on what type you go with. The cost of a concrete slab could be closer to $5,000. On the other hand, a fully finished basement could cost upward of $100,000.

Framing

Once the foundation is built, the framing crew will come in and start constructing the skeleton – or “the bones” – of your house.

Framing will make up a good chunk of your home-building budget and depends heavily on the cost of lumber. For a single-story home, construction costs can range between $20,000 and $50,000 depending on square footage.

Exterior Finishes

Now, your team is going to start making the plain-looking wooden structure look like a home. This means adding siding, a roof, windows and doors.

This can average around $50,000, another significant piece of your building budget.

Major Systems

While your house may be starting to look like what you envisioned from the outside, there is still work to do. At this stage, your home builder will be working to get your house humming with air, electricity and plumbing.

An electrician will wire your home and get you connected to power. This can cost $20,000 – $30,000.

The cost of setting up your home’s HVAC system will depend on the type of system you’re installing, but can cost $1,500 – $13,000.

Costs for plumbing installation can range between $7,000 – $15,000.

Interior Finishes

Interior finishes are like the icing on the cake; they cover up all the stuff happening within the walls (like plumbing, electrical, HVAC) and make it look professionally polished. This includes the less fun but necessary aspects of your home’s interior, such as insulation and drywall, as well as all the fun elements you’ve most likely been looking forward to picking out, including paint, flooring, countertops and cabinetry.

Interior finish costs depend on the quality of the materials you choose, and can end up totaling upward of $175,000.

Let a pro do it for you.

Find a top-rated pro to help on HomeAdvisor.

Additional Home Building Costs

That’s a basic rundown of all the essential hard costs you can expect to pay for when building a home, but there are plenty of other additions you can make, if your wallet can handle them. To build a new home or add on an existing house, you’ll need to acquire a building permit, which of course, costs money. The cost varies based on your location and permitting requirements so you’ll want to double check with your local government’s building and zoning office.

A basic concrete driveway typically costs around $3,000 – if you want something fancier, larger or longer, expect to pay more. If you want that driveway to lead to an attached garage, that’s another $15,000 at the low end – you’ll pay more for additional car space.

Then, there’s landscaping. A basic sod installation may cost on average $1,980, and it rises from there based on the contour of the land and complexity of your vision. If you’re thinking about adding a deck or porch, that can cost $5,530 – $22,150.

The 10 Main Steps Of Building A House

If you’re just dipping your toe into the world of home construction, you may be wondering what the project will entail, but don’t stress yourself out. Just take it one step at a time.

1. Figure Out What You Want

Before you even create a budget or start looking for land, you should get an idea of whether the house style you want is the one you can afford. Deciding on a few basic factors will help you start to get an idea of overall cost.

For many people, building a new house means working with an architect to get exactly the design and construction they want. However, architects can charge as much as $15,000 – $60,000, according to HomeAdvisor.

For a more cost-conscious choice, you might consider buying into a housing development. With this option, you work with a housing developer or builder who offers you a limited number of floorplans, add-ons or upgrades to choose from. You get some amount of customizability at a lower cost.

Prefabricated homes can cost even less. These homes are manufactured off-site, and then the pieces are assembled on location, making construction much speedier than with a regular home. And while they may cost less, prefab homes can be just as beautiful as stick-built homes that are built on-site.

In addition to figuring out what build type you’d like, think about how large you want your house to be and where you want to build it. Bigger houses obviously cost more, and some areas will be more affordable to build in than others. Do your research to determine what will fit with your needs and expected budget.

2. Create Your Budget

Once you’ve decided what you want, your next step should be creating a master budget.

To build a budget, you’ll need to do research and get estimates from building professionals. A good, well-researched budget will keep you on track throughout the process and prevent you from starting something you can’t finish.

3. Buy The Land

When looking for the perfect plot of land to build your home upon, you want to consider whether the location makes sense for you. Is it close enough to the town center? Is the lot itself easily accessible? Are home values in the area similar to your projected home value? You can find land listings online or you can work with a local real estate agent to find the right land for you.

4. Hire Your Professionals

If you’re building a completely custom home, it’s a good idea to hire a general contractor who will coordinate all the subcontractors and legal aspects needed to complete the job.

You’ll probably also want to hire an architect, or at least set up a consultation with one once you’ve developed your blueprints and estimate labor costs.

Make sure all the professionals you hire are properly licensed and have good reviews or references.

5. Develop Plans

If you’re opting for a prefab home or a development home, figuring out your plans will be a little more clear-cut. If you plan to create a custom home, you’ll need to spend some time with an architect to make your vision a structurally-sound reality.

6. Get Your Paperwork In Order

To get your house built, you’ll need permits, permits and more permits. This is where it can be invaluable to have a general contractor on the job; they’ll take care of this for you, as well as any inspections that need to be performed.

7. Purchase Insurance

While your contractors will likely have insurance of their own, purchasing your own insurance to cover the project will protect you financially if anything goes wrong.

8. Begin Construction

Several different teams of professionals will take turns doing their part to turn the vacant property into a home. This part of the process could take 3 – 6 months or longer, depending on weather and other factors.

9. The Final Inspection

Before you can move in, an inspector will need to take one last look at your home to certify that it has been built according to plan, is up to code and suitable for inhabitants.

10. Don’t Forget The Yard

Once the house is built, you’ll probably want to get started on the landscaping, including seeding the lawn and planting foliage.

Is It Cheaper To Buy Or Build A House?

Now that you better understand the types of costs associated with building your dream home, you may wonder if it makes more sense financially to buy or build a house.

That decision will largely depend on what median home prices are in your area and how that compares to what it would cost to build your own home, taking into account the cost of your preferred finishes and floorplans.

According to the National Association of REALTORS®, the median home sale price as of February 2022 is $357,300.

What’s The Cheapest Type Of House To Build?

As you might expect, opting for a home with less square footage and a simpler floor plan is one of the cheapest ways to build a house. As such, ranch homes and tiny houses can be appealing options for home buyers who want the freedom to design their own home on a budget.

Need more space? There are other ways to save on building costs such as using reclaimed building materials or incorporating energy-efficient elements in order to take advantage of tax rebates and credits.

Pros And Cons Of Building A House

While designing and building your own custom home from start to finish may sound like a great idea, building a home isn’t for everyone. Before you begin the process of building a home, it’s critical to carefully consider whether this type of project makes sense for you. There are several pros and cons of building a house that you should consider.

Pros Of Building A House

Some pros of building your own house include:

  • You don’t have to compromise. Purchasing a home requires you to make a lot of compromises in terms of aesthetics, location, floor plan and more. When you build a house, you can make all those decisions for yourself and get exactly what you want.
  • Everything is new. New construction homes have brand new appliances, fixtures and other components, which means they will likely last longer than what would come in a home that’s already been lived in.
  • You can choose your contractors. You’ll be able to do your own research and hire contractors that you’re confident will do a good job.

Cons Of Building A House

Some cons of building your own house include:

  • It typically costs more. While the cost of building and buying a home both can vary greatly, it typically costs more to build than to buy.
  • It takes much longer than buying. Buying an existing home typically takes 1 – 2 months from start to finish, whereas building a house can take much longer.
  • It requires a lot of decision making. You’ll need to make lots of decisions during the home building process, which some people find stressful.

How To Afford To Build A House

It’s clear that building a house from the ground up isn’t a particularly cheap project to take on. You may even be wondering how people can afford to build their own homes. While you can’t take out a traditional mortgage to build a home, you can take out a construction loan. This is a lengthy process that involves submitting building plans to your lender, so make sure to learn about construction loans if this is an option you’re considering.

Once construction on your home is finished, you’ll need to take out a traditional mortgage, which you’ll use to pay off the construction loan. There are also construction loans that convert to a traditional mortgage once the construction is complete.

The Bottom Line: Can You Afford To Build A House?

While building your own house can be rewarding, it’s not something to take lightly. Not only is it an expensive endeavor, it’s also a time-consuming one, and you need to think seriously about whether you’re able to give a project of this magnitude the time and attention it deserves to do everything right.

If the costs are similar and you don’t feel up to taking on a big project, you may find that purchasing a home is a better option for you. However, if you’ve decided it makes sense cost-wise, and you love the idea of being able to live in a home that you helped create, it could be worth all the time and effort involved.

If you decide to embark on your own home-building adventure, you’ll likely need financing. Construction loans are available to get your house built and serve as short-term loans that help you afford the costs of construction. Then, you can get a mortgage to pay off the debt. Get started today with Rocket Mortgage® to see what kind of home financing options are available for you.

Miranda Crace

The Rocket Homes blog is here to bring you all you need to know about buying, selling and making the most of your home. Whether you’re thinking about becoming a homeowner, selling your current home or looking to keep your place in tip-top shape, our writers and freelancers bring their experience and expertise to meet you right where you are.