How Much Does It Cost to Build a House?

Is it the time to finally build your dream home?

The idea surely sounds appealing, except for the tedious construction process and dreading high costs.

If everyone could build a perfect house instantly and cheaply, they would.

Instead, it’s the privilege of a few.

So, how much does it cost to build a house?

What are the deciding price factors?

And, is this the best option that you have?

Let’s find out!

How Much Is It to Build a House?

The average price of building a home in the US is around $300,000. Of course, this figure can vary greatly. Among the most important cost-deciding factors are:

  • Building location and terrain
  • Intended house size
  • Labor costs
  • Building materials
  • Finishes
  • Administrative requirements
  • Specific features such as additional stories, complex shapes, unique designs


The cost of building a house depends on the terrain you are planning to build in. Similar to house purchasing prices, the location and surrounding facilities determine the figure.

For example, buying an average home in downtown New York can cost a small fortune compared to Adamsville in Alabama. Infrastructure, employment rate, crime rate, popular touristic landmarks, and attractions all dictate a real estate value.

Among the most expensive states to start your building project are New York, Connecticut, and Illinois. The construction costs there can reach $950,000.

On the other hand, we have some affordable average home prices, such as those in Georgia, Oregon, and Mississippi. The construction costs there start at $100,000.

San Jose, Chicago, and Washington D.C. are taking the lead when it comes to the most expensive cities. In San Jose, for instance, you can expect to spend $350,000 – $750,000 on an average home.

The lowest average cost per square foot to build a house is in Portland, OR, and Dallas — among the larger cities. A typical home in Portland, OR, ranges between $100,000 and $500,000.

Cost per square foot to build a house

The square foot price of a house to build depends on the location, size, and construction quality. And so the average cost is:

  • $159 per sq. ft. in the US West
  • $156 per sq. ft. in the Northeast
  • $129 per sq. ft. in the Midwest
  • $110 per sq. ft. in the South

So ultimately, to build your own house in the US, you need to invest between $100 and $200 per square foot. Thus, the average price per square foot is around $150.

However, luxurious houses in urban surroundings, where expenses are generally higher, can reach and even exceed $400 per square foot. New York and San Francisco are such examples.

The average cost of building a single-family home

People investing in real estate for the first time, or those just starting a family, may find single-family homes the most suitable investment.

The average cost to build a house like this in 2021 is close to $294,000, according to HomeAdvisor. However, the National Association of Home Builders (NAHB) estimates that this figure can go above $485,000.

Notably, construction costs have growing tendencies, both labor and material-wise.

For example, lumber prices have skyrocketed during the last couple of years. That brought about an average single-family building home price increase of $35,872.

How Much Does It Cost to Build a House — Step by Step Guide

Building your own home is a time-consuming and complex task.

Usually, the process is divided into a few logical segments.

And so, the costs of house renovation, building on existing foundations, and from scratch can significantly differ.

Let’s inspect the costs step by step, assuming you start building a home from the ground up.

So, how much does it cost to build a house from scratch?

Land purchase

The first step towards home building is having a suitable piece of land.

Purchasing a lot adequate for new construction projects can cost anywhere between $3,000 and $150,000. The size, the location, and the utilities are those that dictate its price.

Unfinished lots

These types of lots are present in rural areas mostly. They don’t have electricity cable lines, water utilities, and sewer on the site. Thus, they come with some additional expenses.

The basic facilities can cost you between $3,500 and $40,000. Connecting electricity is usually the most expensive part (can reach $30,000) in the process of building a house on an unfinished lot.

Finished lots

These are the pieces of land that are fully prepared for building. They have all the necessary utilities. No additional costs apply.

On the other hand, these lots can cost significantly more initially. The starting price of finished lots is $50,000.Naturally, the total cost of building a house on your own land will be much lower than if you’re buying land.

However, you still might need to hire somebody to clear your lot and prepare it for construction. This can cost between $1,500 and $5,000.

House plans and designs

You can expect to pay at least $2,000 for an average house plan.

Depending on the company you hire and the complexity of the house plan, the cost can reach $8,000. Furthermore, each professional design that improves the project has a special rate.

Of course, each of these will increase the overall cost to build a house.

And so:

  • An architect will charge you an average rate of $190 an hour.
  • Building engineer services cost approximately $125 an hour.
  • A general contractor usually charges 15% of the project value.
  • Interior designer services can cost you up to $200 an hour, in most cases.

The real estate legal documentation is another pricey but essential part of homebuilding. Whenever possible, opt for quality yet affordable legal services or those with a free trial.

Labor costs

Did you know that labor can take the biggest chunk of building a house cost?

Makes you want to consider building your own house?

Well, even though the labor could take up to 60% of total construction expenses, it’s a realistic price for all the work involved.

The DIY strategy could save you tens of thousands of dollars. However, it involves too much effort, requires specific skills, and it’s time-consuming. You would have to be familiar with at least ten different house-building fields and professions. For example, you’d have to conquer the essence of framing, roofing, plumbing, and more.

Not to mention that you would still need to pay for the additional set of hands since it’s physically impossible to do everything alone.

Building a house on a budget, without the necessary help, could take years to finish, which is a considerable loss of another kind.

Foundation costs

Depending on the size of your foundation and the terrain features, foundation alone costs between $5,000 and $25,000. Adding the fully finished basement could double or triple that price, based on the finishing type.

Also, any terrain irregularities or special undertakings, such as retaining walls or landscaping of the foundation, are charged separately. And this will inevitably increase the final cost of building a home.

  • The slab foundation price starts at $3,500 or $6 per square foot.
  • If you wish to add the basement, you would have to invest at least $12,000 more without the finishing.

How much does a house cost — material-wise?

Due to a wide range of different building materials and everyone’s unique preferences, it’s hard to tell an exact figure. It’s safe to say, though, that materials mostly take around 50% of the summed-up costs to build a home.


Maybe you’ll opt for the most budget-friendly option there, based on your income.

Or, you are the type that seeks material endurance above all.

Or perhaps, you like to put aesthetics first.

In any case, here are some of your options when it comes to choosing materials in each stage of building a new home.

Framing materials

Steel framing generally costs around 10% more than wooden framing since it’s more durable. Keep in mind, however, that the lumber price keeps fluctuating.

Also, timber tends to be the most expensive framing material. This is due to its improved longevity and aesthetic appeal.

Body materials

If you opt for brick, you can expect to spend $10,000 – $80,000. Lately, though, brick is mainly used as siding, so this amount is calculated accordingly. In addition, due to new insulation requirements, houses are rarely fully brick-built.

A concrete body increases the average cost of a house. However, you get to save up to 30% on heating and cooling, thanks to better insulation. So if you set your mind on concrete, $200,000 – $400,000 is a realistic cost to expect.

Wood log cabins can range from $100,000 to $800,000 depending on their size, the type of wood, and building professionals.

Other major material costs to build a house
  • Thermal insulation materials — cost between $0.10 and $1 per square foot.
  • Drywall — costs $10 a sheet.
  • Floor materials —  can range from $1 to $5 per square foot.
  • Roofing materials— costs typically up to $3,000 in total.

So all in all, the cheapest way to build a house could be by the smart combination of different materials.

Installations of major systems

How much does it cost to build a home — depends on the major system installations as well.

These include:

  • Electrical wiring — costs between $20,000 and $30,000, in normal conditions.
  • Plumbing costs — can range from $1,000 to $20,000, depending on the complexity of installations.
  • HVAC costs — usually don’t exceed $15,000.

Adding these together, we get the combined major systems installation costs of $30,000, in the best-case scenario.

And, one can expect to pay around $65,000 for more complex constructions.

Exterior finishings expenses

In the case of the average square footage of a house in the US (2,500 square feet approximately), the exterior finish costs are close to $50,000.

However, exterior walls, doors, windows, and roofs are all exterior finishes. So this price can vary based on each category.

Besides the house’s total size and finishing materials, its shape and the number of openings also play a significant role here.

Interior finishings expenses

Depending on your aspirations, the interior finishes could take a larger portion of your total cost to build a house.

Since this is the part that affects the homeowner’s comfort, they tend to spend large sums on it.

On average, people spend between $50,000 and $200,000 on various interior solutions.

Interior expenses include:

  • Drywall and flooring
  • Countertop and cabinet installations
  • Appliances costs
  • Lighting costs
  • Furnishings
  • Paintings, decorations, and similar

Building vs Buying a Home

Whether to build or buy a house could be one of the most difficult decisions of your life.

On the one hand, you’d have a house that is already available for moving in at a considerably lower price. On the other, you are paying large sums for work-in-progress, but everything is brand new and exactly as you have always imagined it.

And, this is just the gist of a very complex situation.

So many other variables could affect your decision.

For example, custom-made and modular home prices are beyond compare, regardless of whether you are buying or building. Next, everyone has a different budget, time available, and skills to offer.

What is worth sacrificing for one person is irreplaceable for another.

But let’s concentrate one more time on the financial aspect of everything and the possibilities there.

To build or buy a house — which one is cheaper?

Again, this depends on the house features, size, and location. However, the broad estimation is that it could be up to $100,000 cheaper to buy than to build a house of the same category.

This is mostly due to high labor costs and everyone’s tendency to invest in more expensive materials when building for oneself.

Additionally, any innovation or creative detail goes under the special construction price list and further increases the cost.

The cost to build a house yourself vs hiring professionals

Turning into your own home builder could save you $40,000, on average.

Still, this is the least common practice.

No matter how expensive architects, engineers, and builders may seem at first, it’s very difficult or impossible to beat the team of experts when it comes to building.

While you could save a considerable amount on paying others to get the job done, you’d probably waste too much time working alone. Not only that, but you are running into a severe risk of miscalculations and messy outcomes.

So, all things considered, is it cheaper to build a house alone than with professional help?

Unless you possess extraordinary building skills and you have plenty of time on your hands, building a house by yourself can turn out to be even more expensive than buying one in the end.

Home purchasing vs build your own home costs

Considering our previous estimations, it would seem that purchasing an already finished house is the cheapest option available.

The difference between buying and building alone goes up to $60,000. However, that is also relative.

Building your own house does reduce some of the costs, but it inevitably increases the others. For example, you will avoid the labor costs, but you might need the additional reparations later on if you make a mistake.

On the other hand, when purchasing a home, the price is set ahead, and there are rarely any surprises. Besides, getting approval for a loan or mortgage is easier for a house purchase than construction.

And again, there is the time factor. And time is always money in the real estate world.

Bottom Line — Is the Cost of Building a Home Worth It?

Now that you have a somewhat better perception of:

How much does it cost to build a house?

The only thing left is deciding whether this is the ideal solution for you.

As noted above, building a house from scratch is not cheap. Even the cheapest house to build exceeds the price of buying a property in the same category.

However, there are many instances in which it’s worth considering building instead of buying.

Some of them are:

  • You are the type of person that cherishes comfort and beauty over price.
  • You possess a finished lot suitable for building in an excellent location.
  • It’s your dream project.
  • You know the right team of professionals to do it for you.
  • You are an architect, an engineer, or you have building skills.


How long does it take to build a house?

It takes approximately seven and a half months for professionals to finish a house, according to a 2020 US Census Bureau report. However, building a home alone could take much longer.

What is the cheapest type of house to build?

So-called tiny houses are the cheapest houses to build.

How much does it cost to build a tiny house?

On average, it costs $52,000 to build a tiny house. But the price can range from $35,000 to $70,000.

Is it cheaper to build or buy a house?

Generally, it is cheaper to buy than to build a house. However, there are exceptions.

How much does it cost to build a house on my land?

Purchasing and preparing the land for construction can cost from $50,000 to $100,000. So, the total building cost per square foot decreases by that much if you are building on your land.

How much does it cost to clear land?

It costs between $1,500 and $5,000 to clear the land for construction purposes.

How much do modular homes cost?

Modular homes cost $270,000 on average. That is 10–15% less than on-site construction costs.

How much does it cost to build a shop-house?

The usual price for a metal shop house of 1,000 to 2,000 square feet goes from $50,000 to $150,000. So, for those wondering — how much does it cost to build a house for commercial purposes — it all depends on its size and material.


A human nature explorer disguised as a linguist. Maybe if I have traveled less and in fewer directions, I could’ve been an expert in one particular field. Instead, I’m just a passionate researcher, reader, and writer. The subjects that I always gladly cover are mostly from the world of finance, sociology, and psychology. My flying experience (both as a cabin crew and a pilot) taught me never to disregard the human factor. For that reason, I write all my articles in a way that every human can relate to in one aspect or another. In my free time, I am an animal lover (sometimes during work hours too).

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