How Much Does It Cost to Build a House? Buyer's Guide

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Building a home is a great way to get a home that is tailor-made for you and is an experience like no other. However, choosing to build rather than buy comes with a cost. Realizing and understanding this cost is helpful if you decide to dive into the process. 

So, how much does it cost to build a house? This article will answer that question and break it down even further. Keep reading to follow along with the process and find out more! 

Related: What Are The Steps To Renovating A House?

What Is the Total Cost to Build a House? 

The total cost to build a house ranges so much it is hard to give an exact number. However, it usually falls between $112,000 to $460,000. This price is an average and will be higher for big houses and lower for small ones. It also is just the cost of building a home and does not include the price of purchasing the land. 

This generally makes it more expensive to build a house than to buy one. However, it is cheaper than it was to build a house a few years ago when the entire industry was experiencing a massive and costly lumber shortage. Unfortunately, the rising cost of other materials prevented the cost from dipping further. 

While it is more expensive to build a house, there are certain advantages to doing so. After all, you are getting something entirely new when you build. You don’t have to worry about dated features and aging utilities. Plus, building allows you to have an active role in the house’s design. You can pick out things that you want and even change the structure of the home. 

Individual Costs in Building a Home

The average cost of building a home is dependent on a ton of different factors. These will have a massive influence on the price and can be the key thing that drives it up or down. 

Land

The price of land itself needs to be considered when it comes to building a home. You need land upon which you can build. You will also need to have the land cleared and leveled if this hasn’t already been done. 

On average, the price of doing this costs around $80,000. 

However, even this number is influenced by a few factors. The biggest is location, as land in popular urban and suburban areas can be extremely expensive while land in rural areas can be much cheaper. You also need to consider how much work the land will need, as that work will also drive up the price. 

Logistics Preparation

Once you have the land, you can’t just jump right into building a home. You need to prepare a few things first. 

The first is drawing plans. You will work with a builder to decide what you want your house to be and what you want it to look like. 

Then, you will need permits for all of this. Your builder will typically apply for them for you. 

The cost of the house plan tends to be around $5,000. Meanwhile, permits tend to be around $2,000. So, the total cost of this step can be around $7,000, on average. However, as with everything else, there is a lot of variability to this, depending on the size and complexity of the house. 

The House’s Foundation

The foundation of the home is the first thing that is actually worked on. Builders will dig out space for the foundation and then put it in place. 

However, even this comes with a decision beforehand. You will have to choose a type of foundation, with slab, basement, or crawl space being the most common options.

Your choice will have an impact on the price. Slab foundations are generally a lot cheaper, as they are, in essence, a simple concrete slab. However, a crawl space will require more work to construct, and a basement will require even more work, which makes these options more expensive. 

So, once again, there is some variability in this price. However, most foundations tend to fall in at around $10,000. 

The House’s Frame

Once the foundation is complete, you can start building the house. This starts with the frame. The frame is basically when the bones of the house are put in place. Everything else will then be added to this frame.

This process is pretty intense and has a cost to match. It typically averages in at around $35,000. 

Exterior Features

With the frame in place, this step in the house’s construction will essentially involve covering the house completely. This means that exterior walls go up, the roof is put on, and the exterior windows and doors are placed. 

Because of all of the work and materials involved with this step, it becomes another costly one. On average, you can expect to pay around $50,000 for this step.

Household Systems

Your house isn’t just a well-constructed fixture of wood; it takes numerous systems to function properly. Specifically, it requires plumbing, electrical, and HVAC systems. Otherwise, the home simply will not be livable. 

Together, these systems cost upwards of $50,000 to put in place. This number just includes the systems themselves. It doesn’t include some of the fixtures you typically associate with these systems. So, it includes the pipes to deliver water through the house but doesn’t necessarily include the sinks those pipes are connected to. 

Interior Features

Earlier in the process, exterior features, like walls and doors, went up. Now, at this point in the process, the same is done for the interior. 

The features added to the interior are more varied and plentiful. The walls and some floors and ceilings will need to be insulated. Then, the drywall will need to go up, and the flooring will need to go down. Around the same time, interior doors will be hung. Plus, there are tons of little things on top of all of this, ranging from cabinets to some appliances. 

This is another step with a high-cost range. This is because the things you put into a home will vary dramatically depending on quality. For example, a budget refrigerator will cost a few hundred dollars, while one with plenty of new features will cost a few thousand dollars. 

However, that more costly refrigerator may be worth considering if it is more energy efficient and will save money in the long run. So, there is a lot of range and a lot to think about regarding this step. 

In general, this means that you can expect to pay around $100,000 for this step. However, this number will easily get bigger if you are dealing with a larger house or one using more expensive features. 

Related: The Best Cheap Flooring Options

Outdoor Surroundings

Now that the home itself is finished, the area around it needs to be worked on. Some of this is essential, like grading the land so that it will allow water to drain. However, much of it is optional and aesthetic. 

A big thing at this step is the landscaping. Most people opt for at least some flowers, trees, and shrubs. Some go for more elaborate options, with intense flowerbeds and other features. However, at minimum, everyone will need the yard seeded for grass. 

There are other options to pick from as well. Many people opt for a deck or porch so that they have a space to spend time outside. Meanwhile, others choose to install a pool. 

Once again, this is another place where the cost can change dramatically. Adding a deck to the home can cost several thousand dollars. Meanwhile, adding a pool can drive up the cost by tens of thousands of dollars, especially since most pools require a large space around them. So, ultimately, the total cost of the outdoor surroundings of a home can be as low as $7,000 or as high as $200,000. 

What Affects the Cost of Building?

With all of these costs in mind, it is important to note that there is even more that affects the cost of building a home. 

A common real estate maxim is that “location, location, location” are the three most important things to consider. This is true for building as well as buying. We already talked about the fact that land is often more expensive in urban and suburban areas than it is in rural ones. However, what state you plan to build a home in can have an impact too. For example, Arkansas, Tennessee, and West Virginia are the cheapest states to buy land. 

There are other local costs as well. Local laws and legislation will impact how much you have to pay in taxes or permits. Even the cost of materials can vary based on your location. 

Speaking of material costs, market trends are another uncontrollable factor when it comes to building a house. Back in 2021, a lumber crisis threw off the entire home-building industry and made it far more costly to build a home. More recently, inflation has had an impact on the price of materials. 

On top of all this, the ever-fluctuating nature of the real estate industry will also impact things. Paying attention to these factors can help you save money. By doing this, you can pick a time when building is cheaper. 

Should You Build or Buy a House? 

If you are looking to get a house, you have two options: building or buying. For many, this is the ultimate question they need to answer, and it takes some time to consider. 

Reasons to Buy

Money always matters. So, for most, the biggest reason to buy a house is the price. This is because building a home is usually more expensive than buying one. This gives buying a home a distinct advantage and may even put building out of reach for some. However, how much this matters overall will depend on your specific financial situation and the budget you have allotted toward purchasing a house.

On top of this, building a home is an intense process that not everyone will enjoy. It involves making important decisions that will greatly impact your life in your new home. This is stressful on its own. However, add in the uncertainty of the process as a whole and the surprises you will have to deal with along the way, and the entire process is even more stressful. 

Plus, building a house takes a long time. You will have to deal with these stresses for several months. Meanwhile, you can buy a home in a much shorter period of time.

Reasons to Build

While price generally makes buying more favorable, there are situations where building is actually the better option. For example, if you need a specific number of bedrooms or want a master bathroom that is slightly bigger than any you have seen, achieving these goals is easier when you build your home. 

It may even save you money. It can cost a lot of money to renovate a home, especially if what you have in mind is an intense job. For example, adding an entire extra room to an existing house raises the total cost of that home dramatically. Or, adding an entire second story will come with some huge expenses. You could have potentially spent a similar amount building your own home and had exactly what you wanted from the start. 

Finally, building a home gives you an entirely new product. You don’t have to worry about it showing signs of age or having dated concepts within. So, if you’re planning on sticking with your home for the long haul, building can be a solid option. 

Would a conceptual floor plan or 3-D rendering make the home building and planning process easier for you? Request a quote today for site plans and more! 

How to Pay for Building a House

While buying a home typically means taking on a mortgage, building a home doesn’t usually allow this same pathway. 

Because of this, most people interested in building a home will take out a home construction loan. These are exactly what they sound like: loans designed to help pay for the construction of a new home. You can even structure some of these loans to become a standard mortgage loan once the home is built. 

The Cost of Building a Home

Building a home comes with many different steps that all have their costs. This makes the building process a little expensive. However, for many people, the ultimate product is worth the cost. All you have to do now is decide if it is worth it for you. 

Related: What Is The Cheapest Way To Build A House?

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