Personal Finance Mortgages
Written by Laura Grace Tarpley, CEPF and Aly J. Yale; edited by Sarah Silbert
Updated
- Key factors affecting cost
- FAQs
Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews.
- According to HomeAdvisor, you could spend $50 to $400 per square foot when building a house.
- Framing is probably the most expensive part, and you'll pay more as you add stories and rooms.
- Building a home is usually more expensive than buying one, but not always.
Building a home has a ton of potential perks. You can live in a house with the layout and design you want, and you don't have to shop for a place or duke it out in a bidding war.
Still, building a home comes with costs you wouldn't have to think about when buying a home. It's often more expensive than buying, and while you may decide it's worth the cost, it's good to be prepared. Here's what you can expect to spend:
It depends: Key factors affecting cost
Home building costs can vary widely from one buyer to the next. The exact cost you'll pay will depend on:
Location and land costs
The location you choose to build in can have a huge impact on your total building costs. Not only do land costs vary quite a bit from market to market, but also the costs of labor, permits, building materials, and more.
For example, the average cost to build a home in California is about $1.35 million, according to HomeAdvisor. In Texas, it's just $260,000.
Size and complexity of the house
A larger home with more space and more rooms is going to cost more than a smaller one, as it takes up more land, uses more materials, and requires more labor. Homes with more complex features and layouts also tend to cost more.
While it varies widely, here's the average cost to build a house per square foot (nationally):
The cost to build a house, per square foot
According to HomeAdvisor, the average cost of building a new home is $50 to $400 per square foot.
| Square feet | Average cost |
| 800 | $80,000 - $160,000 |
| 900 | $90,000 - $180,000 |
| 1,000 | $100,000 - $200,000 |
| 1,200 | $120,000 - $240,000 |
| 1,500 | $150,000 - $300,000 |
| 1,800 | $180,000 - $360,000 |
| 2,000 | $200,000 - $400,000 |
| 2,500 | $250,000 - $500,000 |
| 2,700 | $270,000 - $540,000 |
| 3,000 | $300,000 - $600,000 |
| 4,000 | $400,000 - $800,000 |
| 5,000 | $500,000 - $1 million |
Numbers provided by HomeAdvisor.
However, if you want to build a luxury or customized house, you can expect costs to jump up to $500 or more per square foot. That means an 800-square-foot home could cost $400,000 or more, and a 5,000-square-foot home would cost around $2.5 million.
Materials and finishes
The materials you choose to use in your home can play a big role in your bill, too. In fact, materials make up about 50% of your budget when building a home, according to HomeAdvisor. These include things like siding, drywall, roofing, concrete, piping, and more.
Finishes — which are the decorative elements that cover the exterior and interior of your home (think bricks, paint, and countertops) — are another big part. You can usually reduce your costs by choosing builder-grade finishes. These are the basic-level, generic ones, while higher-end options may be more customized and unique.
Labor costs
Labor is another huge chunk of your costs — usually around 40%, according to HomeAdvisor. Again, labor costs can vary a lot by location. For instance, if there was recently a storm in your area and contractors and builders are in high demand for repairs and renovations, you can expect to pay more than you would in less busy times. If your market has higher minimum wages than other cities, you can also expect to pay more.
The number of laborers, how long it takes them, and the level of specialization you need can also factor into your labor costs.
Permits, fees, and inspections
Administrative costs can add to your bill, as well. These usually include various building permits and city inspections, and you may have costs for connecting to local utilities, sewage systems, or cable lines, too.
Typical cost ranges
Every home build is different, so costs can range quite a bit, too. Generally speaking, you can expect to pay the following for the individual aspects of building your home.
| Work | Typical cost |
| Labor | |
| -Construction manager | $2,780 - $60,402 |
| -Roofer | $45 - $75 per hour |
| -Concrete contractor | $45 per hour |
| -Soil test | $708 - $2,008 |
| -Landscape architect | $955 - $4,281 |
| -Land excavator | $120 - $150 per hour |
| -Land surveyor | $375 - $745 |
| -Electrician | $50 - $100 per hour |
| -Structural engineer | $100 - $200 per hour |
| -Plumber | $45 - $200 per hour |
| -Framer | $7 - $16 per sq. foot |
| -Drywaller | $1 - $3 per sq. foot |
| Framing | $20,000 - $50,000 |
| Major systems installation | |
| -Rough-in plumbing | $7,000 - $15,000 |
| -Electrical wiring | $20,000 - $30,000 |
| -HVAC | $1,500 - $13,000 |
| Foundation | |
| -Slab | $7,000 - $20,000 |
| -Basem*nt | $24,000 - $44,500 |
| Exterior finishing | |
| -Roofing installation | $5,700 - $12,000 |
| -Windows | $3,000 - $9,600 |
| -Exterior painting | $1,800 - $4,400 |
| Interior finishing | |
| -Cabinets | $2,000 - $30,000 |
| -Countertops | $2,000 - $4,350 |
| -Doors | $5,000 - $20,000 |
| -Flooring | $10,000 - $35,000 |
| -Interior painting | $4,000 - $11,000 |
| -Appliances | $3,000 - $15,000 |
| -Lighting fixtures | $2,000 - $12,000 |
| -Fireplace | $1,000 - $10,000 |
| House plans | |
| -Architect | $125 - $250 per hour |
| -Engineer | $100 - $200 per hour |
| -Draftsperson | $50 - $130 per hour |
| -Interior designer | $50 - $200 per hour |
| -General contractor | 10% - 20% of total project costs |
Numbers provided by HomeAdvisor.
You'll notice some of these expenses vary drastically. That's because costs can depend on factors such as where you live and which materials you're using for your home.
You might also spend money on clearing land to build your home on a plot, repairing an existing foundation, or structuring your home so it's built on stilts.
Budgeting considerations
Remember, the actual cost of building a home will be based on several factors, including where you live and whether you're hiring a production builder or customized builder. You'll also save money if you build the home yourself rather than hire someone, but you'll need a license and a special type of construction loan.
You can also stay on budget by comparing vendors, buying materials in bulk, reducing the size and complexity of the house, choosing simple finishes, and building an already finished plot of land.
FAQs
How can I save money building a house?
If you're building a house on a budget, choose a smaller, simple layout, builder-grade materials and finishes, and act as your own general contractor (if you have the experience). Comparing vendors and buying materials in bulk can also help.
Can I get a loan to build a house?
Many lenders offer construction loans, which you can use to cover the costs of materials, labor, and other homebuilding expenses. These often transition into traditional mortgages once the home is complete, allowing you to pay the balance off over time.
Is it cheaper to build or buy a house?
The cost to build a house vs. buying depends on your market and the size and type of home you're looking for. Buying can often be cheaper, but you'll have fewer customization options and it can be a more complex (and longer) process.
Where can I find reliable estimates for building costs?
If you're wondering how to estimate the cost of building a house off-hand, you can use online cost calculators and estimators. For the most accurate number, though, your best bet is a local contractor or builder. They'll be able to customize a quote based on your exact needs and preferences.
How long does it take to build a house?
The timeline for building a house ranges anywhere from six months to a few years, depending on the size and complexity of the home, the availability of labor and materials, local weather conditions, and more.
Can I build a house myself?
While DIYing it could be a cheap way to build a house, it could also be dangerous if you don't have the right expertise or experience. You also may find it hard to get financing if you don't have a contractor's license.
Personal Finance Reviews Editor
Laura Grace Tarpley (she/her) is an expert in mortgage rates, refinance rates, lenders, bank accounts, and borrowing and savings tips for Personal Finance Insider. She worked on Business Insider's "The Road to Home" series, which won a Silver award from the National Associate of Real Estate Editors.She has written about personal finance for over seven years. Before joining the Business Insider team, she was a freelance finance writer for companies like SoFi and The Penny Hoarder, as well as an editor at FluentU.
Aly J. Yale is a freelance writer, specializing in real estate, mortgage, and the housing market. Her work has been published in Forbes, Money Magazine, Bankrate, The Motley Fool, The Balance, Money Under 30, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from TCU's Bob Schieffer College of Communication with a focus on radio-TV-film and news-editorial journalism. Connect with her on TwitterorLinkedIn.
Top Offers From Our Partners
SoFi Checking and Savings Earn up to 4.60% APY on savings balances and up to a $300 bonus with qualifying direct deposit. FDIC Insured. There is no minimum direct deposit amount required to qualify for the 4.60% APY for savings. Members without direct deposit will earn up to 1.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. To earn the $300 bonus, the customer must complete a direct deposit with a minimum initial deposit of $250 in a new SoFi Checking and Savings account within 45 days of clicking to qualify (offer expires 12/31/24).
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
**Enrollment required.
Reference
Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview
Thanks for signing up!
Access your favorite topics in a personalized feed while you're on the go.
