Building a House: Calculate How Much It Costs?

Finding the perfect house can be difficult, especially when inventory is tight. If the homes in your intended area are too big, too small, or not quite right, you might consider building a house from scratch.

While there’s more work involved, this could be a cheaper option that allows you to customize your home.

Here’s what to know about the total costs involved in building a house:

How much does it cost to build a house?

The median price of a new construction home was $429,800 in August 2024, while the median size of a new home was 2,164 square feet in 2024. Taking these figures into account, $198 is a realistic cost per square foot.

Building costs also vary by location and the style of the home. You’ll also need to factor in the cost of labor, building materials, and interior finishes.

All of these factors can drive the per-square-foot cost up to $400 or more in expensive cities like New York and San Francisco.

The factors behind your homebuilding costs

The cost of building a new home varies, based on many factors. If you’re thinking about taking this route, consider the following factors. The tables below use data sourced from HomeAdvisor unless otherwise noted.

Square footage

The size of your new home will greatly influence the cost. Generally, a larger home costs more to build because you’re using more materials. The median size of a new single-family home in 2024 is 2,164 square feet, according to the U.S. Census Bureau.

Here’s what you might pay to build a home assuming a $100 to $200 cost per square foot:

Location

Location impacts the price of new home construction in a few ways. The same house in one state might cost twice as much to build as it would in another because of variations in the cost of labor, materials, regulations, and permit requirements.

Plus, the actual site of the home — with its unique size, shape, soil, and climate — will also impact the cost. For instance, steep slopes or poor soil will typically require more engineering and foundation work.

Here is a look at what it can cost to build a home in certain U.S. cities. Bear in mind that the actual price will vary depending on the specifics of the home and other details but this will give you a good idea. 

*Price range data sourced from Houzeo, HomeLight, and UpNest.

Labor

Labor costs account for about 40% of the homebuilding budget. These labor costs vary with each region, the size and complexity of the house, and your general contractor’s buying power. Larger homes that require more customization cost more than smaller homes that are built using prefabricated pieces.

Some of the professionals you may hire include:

*Price range data sourced from Angi, Total Mortgage, Bob Vila, HomeGuide, and HomeAdvisor.

Materials

The materials used to build your home may take about 60% of your total budget. But the cost is heavily influenced by the quality of the material you choose. When you’re in the planning stages, you can work with the builder to choose materials that fit within your budget. They’ll give you an estimate based on your designs.

Here’s a cost breakdown of some of the basic materials your builder will need to buy:

*Price range data sourced from Total Mortgage.

Special features

If you’re looking to build a luxury or custom home, the price per square foot typically increases from $200 to $500 per square foot. But you can add one or two special features — such as a swimming pool, heated floors, higher ceilings, or a basement — to better fit your budget.

Amenities like these can help you enjoy your new home, but they’ll increase your budget accordingly. 

Here’s the price tag on a few popular features:

*Price range data sourced from Angi, HomeGuide, and Lawn Love.

Find Out: How To Buy a House: Step-by-Step Guide 

Breakdown of the average cost to build a home

The cost of building a house varies depending on where you’re building, the size of the home, the materials you use, and other factors, but the following cost breakdown should give you an idea of the price ranges you can expect:

Buying and clearing land: $1,200 to $3,700

Before you build a home, you’ll need to buy a plot of land. The average lot size is 17,218 square feet, or less than half an acre, according to the National Association of Home Builders (NAHB).

Depending on the size you choose and whether utilities and sewer lines are available, a piece of land will cost $18,914 per acre on average in the United States. That price will vary in lower- and higher-cost areas. Then, hiring people to clear your land for construction prep costs between $1,200 to $3,700.

Paying for floor plans: $2,000 to $10,000

Once you’ve bought your land, you’ll need to hire professionals to draw up floor plans for the house. You might pay about $2,000 to $10,000 for the plans, which you’ll hand to your builder. They’ll use the plans to give you a “cost to build” estimate.

Keep Reading: Best Time to Buy a Home

Getting building permits: $500 to $2,000

A building permit is a document that says you’ve received permission from your local government to begin the homebuilding process. Once the construction is complete, it will go through inspections before the permit can be approved and closed out.

Laying the foundation: $5,200 to $21,000

Laying a foundation involves digging space for the foundation, preparing the land, pouring the concrete, and getting it to set right. You might also need to perform some additional landscaping to address any potential issues with the foundation.

Framing the house: $14,000 to $32,000

After laying the foundation, your builder creates the frame, which is like the skeleton of the house. The type of frame you choose will greatly influence the price tag, which runs from $14,000 to $32,000.

The framer will take care of:

• The home’s overall frame
• Trusses and general metalwork
• Sheathing and subfloor installation
• Windows and door installation

Interior finishes: $50,000 to $150,000

The interior finishes turn your structure into a home. These include things like insulation, walls, flooring, interior doors, fixtures, cabinets, and countertops. The builder will also paint walls and hook up major appliances.

Installing major systems: $17,000 to $72,000

Major systems consist of your plumbing and HVAC systems. Once installed, your builder will connect these systems to the local utilities. Expect this to cost $17,000 to $72,000 depending on the size of the home, the type of systems you’re installing, and the quality of the materials.

How to calculate the cost of building a house

Homebuilders’ price estimates are based on expert knowledge and experience, and they factor in every aspect of the structure, systems, and finishes of a home. But you can get a ballpark figure for the cost of building your own home by using their prices as a starting point.

To estimate the cost of building a home, you’ll want to take the following steps:

1. Determine the size, style, and location: Have a general idea of how big you want your home to be, the type of finishes you want, and where you’d like to build it.
2. Shop local builders’ websites: To get an idea of what builders are charging for homes similar to yours, check out their websites and request quotes. Be sure to match features like garages, the number of roof angles, how many floors there are, the type of foundation, and the construction materials.
3. Do the math: Average the sizes and prices of homes you like, and divide the average price by the average square footage. Use that price-per-square-foot figure as a guide when you’re browsing building plans.
4. Research finishes and features: Look into the finishes and features that come with comparable homes, and make adjustments for your own preferences. Characteristics like builder-grade carpet versus hardwood flooring, and vinyl siding versus fiber cement siding, can mean a difference of thousands of dollars in otherwise identical homes.
5. Calculate the cost of acquiring land: If you don’t already have a building lot, you’ll need to buy the land to build your home on. You can search listings on real estate portals like Redfin, or work with a local real estate agent.
6. Factor in the cost of preparing the lot: Unless it’s already clear and has access to utilities, you’ll have to make some phone calls to determine the costs involved in completing that work.
7. Don’t forget about permits and inspections: Builders’ prices often include required permits and inspections. If the comparable homes you researched didn’t include those, contact your local zoning office to find out what’s required and how much it costs.
8. Add the cost of your blueprints: You’re going to need to hire a draftsperson to create a home blueprint or house plan. Costs vary widely according to the complexity of the design and whether you select off-the-shelf prints or opt for a custom home design.
9. Leave room for overruns: Leave room in your budget for unexpected expenses and cost overruns.

Type of house you can afford to build based on your budget

Building a new home is expensive, but you can control costs by building only as much home as you need, keeping the design simple, and resisting the temptation to go overboard on upgrades. Use a mortgage calculator to help you figure out what you can afford. Here’s what you can expect for various budget levels.

Budget of under $200,000

At $187 per square foot, you can build a house of up to 1,069 square feet. That’s enough space for two bedrooms — three if they’re on the small side — and two baths. Homes this size make good starter homes, downsizes, or investment properties.

Learn More: How much will a $150k mortgage cost you?

Budget of $200,000 to $299,000

A budget in this range will get you 1,069 to 1,599 square feet, depending on the options you choose. At the high end, you can expect three bedrooms, and perhaps four bedrooms or three bedrooms and a smaller home office. You might add a half-bath and a porch, patio, or deck as well.

Learn More: How much will a $200k mortgage cost you?

Budget of $300,000 to $399,000

You can expect to get 1,604 to 2,134 square feet at this price range. You should be able to accommodate the most common home characteristics as well: at least three bedrooms and 2.5 baths, plus outdoor features.

If you want a more elaborate design or more bedrooms and baths, you might have to compromise on finishes to keep it within your budget.

Learn More: How much will a $300k mortgage cost you?

Budget of $400,000 to $499,000

A budget in the $400,000 range should get you a nice home with anywhere from 2,139 to 2,668 square feet. This could include four bedrooms, three baths, higher-end finishes, and larger or more elaborate outdoor features, such as a covered porch instead of a bare-bones open deck.

Learn More: How much will a $400k mortgage cost you?

Budget of $500,000 to $750,000

This is a high-end budget that will get you a premium home design with four to five bedrooms and perhaps a home office to boot, and at least three baths. You can likely afford 2,674 to 4,011 square feet.

Expect homes in this price range to come standard with more luxurious finishes, which means you might have to downgrade or simplify the design to stay in the lower range of the budget.

Budget of $750,000 and up

If you’re able to afford this budget, it will get you a house with at least 4,011 square feet, which is plenty of space for five to six bedrooms and three to four baths, plus a home office.

Again, the quality of finishes will be proportional to the value of the home, but think twice before you opt for a cheaper finish to save money, as this may reduce the home’s resale value.

Learn More: How much will a $1 million mortgage cost you?

When to consider building a house

While building a home can get pricey, the ability to customize the space makes the cost worthwhile to some homebuyers. 

Consider these pros and cons if you’re thinking about building a home:

Frequently asked questions

Is it cheaper to buy or build a house?

Location, housing market conditions and personal needs will all influence how much you spend on a house. According to the U.S. Census Bureau, the price of a newly constructed home was $429,800 in July 2024. On the other hand, buying an existing house can help you become a homeowner faster and may be less expensive; the median price of an existing home in July 2024 was $422,600, according to data compiled by the National Association of REALTORS®. 

How can I finance building a house?

One option for building your own house is to take out a construction loan. It starts as a short-term loan, with funds provided at intervals throughout construction. After the home is finished, the loan can be converted into a traditional home loan.

How much money should I have saved to build a house?

If you’re planning to use a construction loan, you should aim to save at least 20% for a down payment. It’s also a good idea to save an extra 10% to 15% for surprises or extra construction costs. For example, if you’re planning to borrow $350,000, you should plan to save at least $70,000 for the down payment and an extra $35,000 to $52,500 for extra expenses.

What is the most expensive part of building a house?

Interior finishes can add up quickly, often accounting for 24% or more of the homebuilding budget. Costs for flooring, countertops, appliances and cabinetry can vary depending on what materials and options you select. 

What are the disadvantages of building a house?

While you can customize every aspect of your home, there are some downsides to building a house:

• Time-consuming: Construction can take seven months to a year 
• Costly: You’ll need to pay for labor, permits and materials upfront
• Unpredictable: Inclement weather or labor and supply shortages can delay construction or increase costs

What is the cheapest house to build?

The most cost-effective home options often have basic options and simple floor plans, such as modular or ranch homes. The cost to build a modular home is between $80 and $160 per square foot while a one-story ranch home could cost between $100 and $200. If you’re building a bigger home with high-end finishes, your total cost will be more.

Is it cheaper to build a house or a barndominium?

A barndominium is a metal building that looks like a barn converted into a home. Because the floor plan is simple and the building materials are cheaper than they are for more elaborate homes, the average cost per square foot is between $100 and $145. Land costs, labor and materials could influence the overall cost.