How Much Does It Cost To Build A House In 2023?

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Sometimes it’s hard to find the perfect house in the perfect location at the right price, so you just have to build a house from scratch. 

But How Much Does It Cost To Build a House?

According to Forbes, the average cost to build a home in 2023 is around $300,000. According to the U.S. Census Bureau, the median price for a contractor-built single-family home in 2021 was $343,600.

Your house’s price tag will vary depending on where you live, the size of the home, the materials used, and the labor required as well as several other factors. Plus, you’ll need to buy the land that the home sits on.

Let’s break down all of the main variables you’ll encounter when deciding to build a home and how much you should expect to pay.

Average cost to build a house per square foot 

It should come as no surprise that the biggest cost factor is the size of your house. More house means more materials and higher labor costs. 

On average, the cost of building a house is $150 per square foot. If you assume it’ll cost you $100 per square foot on the low end and $200 on the high end – or $400 per square foot in some major cities, including New York and San Francisco. Here’s how much you can expect to pay based on your home’s size:

Square Feet	Average Price Range
600	$60,000–$120,000
1,000	$100,000–$200,000
1,200	$120,000–$240,000
1,500	$150,000–$300,000
2,000	$200,000–$400,000
3,000	$300,000–$600,000
4,000	$400,000–$800,000
5,000	$500,000–$1,000,000

Another variable that’ll impact your square footage is how large your house footprint is. In general, it’s cheaper to build up than to build out. If you’re looking to build a four-bedroom home, consider making it two or three stories to decrease your footprint. 

Average costs by location

Before we get into the home building costs, note that building a three-bedroom home in Seattle will cost a lot more than building the same home in the suburbs of Tulsa, Oklahoma. 

The cost of land itself depends greatly on where you live. In 2022, the National Association of Home Builders revealed that the median price for a lot was $55,000. However, the median lot price in New England was around $200,000. Depending on your lot, you’ll also have to budget for land preparation costs, which range from $1,300 to $5,100.

This chart details the average cost to build a 2,000-square-foot home in each state as of early 2023:

State	Ave. Cost	State	Ave. Cost	State	Ave. Cost
Alabama	$267,620	Louisiana	$269,920	Ohio	$222,480
Alaska	$421,080	Maine	$282,140	Oklahoma	$260,500
Arizona	$295,580	Maryland	$294,160	Oregon	$340,580
Arkansas	$251,800	Massachusetts	$350,820	Pennsylvania	$302,200
California	$405,440	Michigan	$216,780	Rhode Island	$338,180
Colorado	$299,300	Minnesota	$236,980	South Carolina	$301,840
Connecticut	$345,440	Mississippi	$255,320	South Dakota	$204,420
Delaware	$327,060	Missouri	$226,760	Tennessee	$261,940
Florida	$263,640	Montana	$298,960	Texas	$264,100
Georgia	$273,860	Nebraska	$210,900	Utah	$288,560
Hawaii	$412,840	Nevada	$334,140	Vermont	$307,840
Idaho	$315,520	New Hampshire	$299,900	Virginia	$310,100
Indiana	$219,300	New Jersey	$376,900	Washington	$343,100
Illinois	$265,440	New Mexico	$290,940	West Virginia	$301,120
Iowa	$214,040	New York	$360,180	Wisconsin	$239,140
Kansas	$207,120	North Carolina	$301,500	Wyoming	$290,420
Kentucky	$280,580	North Dakota	$212,500

Local regulations will also impact your cost estimates. Every city, county, and state has different resident construction restrictions. Read up on the building codes in your state and neighborhood before starting any new construction. Violations can be costly mistakes. 

Cost Breakdown for Building a House

The cost of building materials has increased significantly in the last few years, so a home construction loan will cost more now than it did a few years ago. However, it can still be a more cost-effective option. Let’s look at a breakdown of what goes into building a single-family home and how much you can expect to spend as you go through the steps of a home construction project:

Pre-construction costs: $55,750 to $105,000

Pre-construction costs are expenses that must be sorted out before you can break ground. These costs include land, land prep, utility connections, and more.

Purchasing and prepping land for construction: $1,000 to $50,000+

To build a house, you need land to place it on. An often overlooked part of the construction process is acquiring the land needed to build.

Depending on the location, these costs will vary, but note that the purchase price for land can easily exceed $50,000 for a small parcel in a populated area but be as low as a few thousand dollars in a rural area.

Once you have the land, you’ll need to prep it, which means tree removal, grading, and anything else that’s required to get the land ready to start building a home. These expenses can amount to somewhere between $1,000 and $7,000, depending on the scale of the project.

Finished or unfinished lots: $550 to $30,000+

Finished lots include sewer, cable lines, and utilities. Land developers for most metropolitan areas will finish the lot before they list it, so it’s one less thing for you to worry about. 

The same cannot be said for many rural areas. If you buy unfinished land, plan to pay for some major system costs to connect to the nearby city, including:

• Sewer costs: $550–$2,300.
• Water line costs: $1,000–$5,000.
• Electric grid costs: $1,000–$30,000.

You may also have to buy and pour concrete to connect your property to a road, which can bring a whole new set of costs. Paved driveways usually go for $4,500, while gravel ones are much cheaper.

Purchasing a floor plan: $500 to $5,000

Once you know where you’re building and how large you want your home to be, the next step is to pick out a floor plan. Whether you’re looking to build a quaint two-bedroom cottage or a spacious beach house, there are plenty of predesigned floor plans to choose from. These designs come with abundant features homeowners want, so you can save money by selecting a stock floor plan. These plans usually cost between $500 and $5,000.

You can also pay a premium and hire an architect to draw up a custom floor plan, but note that it costs more if you opt for using a professional.

Building permits and local fees: $1,200 to $2,000

You can’t start the home-building process without a building permit. Building permits usually cost between $1,200 and $2,000, depending on where you’re building and what permits you need. 

Be sure to check with your local municipalities for any information regarding permits and construction laws, as all cities and local jurisdictions tend to have different sets of requirements and fees.

Exterior material costs: $67,000 to $87,000

The exterior of a new home is the next phase in the building process. Exterior materials will be those you need for the foundation, frame, and outer walls of the home. 

Foundation: $8,000

The foundation of a home is critical to its stability and safety. If the foundation is off, there could be serious consequences and a hefty repair cost. The average cost to build a foundation is around $8,000, and even more if you plan to have a basement.

Framing: $25,000 to $45,000

The frame is your home’s skeleton, and it’s usually made of wood. The frame is built first, and it supports finishing features, like your roof, doors, windows, and drywall. Most framers also install the windows and doors and take care of your home’s subfloor installation and sheathing. 

On average, framing will cost $25,000-$45,000.

Roofing: $10,000

The cost of a roof varies depending on the type that you opt for. On average, most will cost around $10,000 for traditional asphalt shingles, but that number can climb if you need a larger roof or want a different style. 

Exterior walls: $12 per square foot

Exterior finishes include materials or coatings used to protect and make your exterior wall surfaces aesthetically pleasing with siding, shingles, stucco, and masonry veneer. Basic siding will cost around $12 per square foot but can easily become more expensive with different materials.

Interior material costs: $68,000 to $255,000 (plus labor)

When calculating how much it costs to build a house, the interior material costs could be the most expensive part. Your price will depend on factors like how much space you have to fill and  the quality of the materials you buy.

HVAC, electrical, and plumbing: $15,000 to $75,000

HVAC, electrical, and plumbing are all very labor-intensive, and these costs are not something you should ever cut corners on. All three of these major systems are vital to your home’s safety and efficiency. Prices for these range from:

• HVAC: $5,000–$10,000.
• Electricity: $3–$5 per square foot.
• Plumbing: $2,000–$15,000.

On average, when combined, these three will cost anywhere between $15,000 and $75,000.

Insulation: $3,000 to $5,000

Insulation helps to keep your home energy efficient and comfortable. The costs can range from $3,000–$5,000 on average, but it varies depending on the type of insulation you use and the amount you need.

Fixtures and finishes: $50,000 to $175,000

Your interior finishes include all the materials used to cover the inside of your home’s frame. The costs vary greatly. If you’re on a tight budget, this is one of your best opportunities to save money. If you’re looking for luxury, finishing your interior could become the most expensive aspect of your home build. On average, interior finishes range from $50,000 -$175,000. Some of these finishes include:

• Appliances: $3,000 – $24,000.
• Cabinets: $2,000 – $30,000.
• Countertops: $1,800 – $4,200.
• Light fixtures: $2,000 – $12,000.
• Doors: $360 – $1,150 per door.
• Windows: $150 – $200 per window.
• Drywall: $1.50 – $3 per square foot.
• Floors: $1,500 – $4,500 per 500 square feet.
• Shower/bathtub: $4,000 – $6,000.
• Paint: $5 per square foot.

Labor: 30% to 50% of the total project cost

The cost of labor will make up about 30%–50% of your total project cost.

Modular homes, also known as prefabricated homes, have reduced labor costs because most of the work is done off-site, then the home is shipped to your lot to be assembled. If you want a custom build, the lack of prefabrication can substantially increase labor. 

Not including materials, here are some labor costs to budget for:

• General contractor rates: 10%–20% of total project cost.
• Construction manager costs: 5%–15% of total project cost.
• Architectural fees: $100–$250 per hour.
• Draftsperson designer rates: $80–$150 per hour.
• Electrician rates: $50- $100 per hour.
• House framer rates: $7–$16 per hour.
• Interior designer rates: $50–$500 per hour.
• Landscape architect rates: $50–$80 per hour.
• Plumber costs: $45–$200 per hour.
• Structural engineer rates: $100–$200 per hour.

Building a Custom Home vs. Production Home

A custom home is one where you get complete control over every aspect of building your dream home. You’ll choose the location, floor plan, and materials to create the perfect place for you. A production home, on the other hand, is a semi-custom home that allows you to choose your floor plan from the options a builder has available on a lot within their planned community.

The cost difference between building a completely custom home and selecting a production home can be significant. In fact, building a custom home can cost up to $400 or more per square foot. By choosing a production home, you can save yourself as much as 30% in some cases but at least 15% in most.

What Makes a House Less Expensive To Build?

If you have the skills and time to take on any of these installations, you can significantly reduce the total home-building cost. Painting alone can easily save you thousands of dollars. 

However, if you don’t have these skills, hire a professional. It usually costs a lot more to hire someone to fix one’s mistakes and reinstall something than just hiring a professional in the first place.

How Long Does It Take To Build a House?

The Census Bureau’s Survey of Construction shows that the average number of months it took to build a home from start to finish in 2021 was 7.6 months. Homes built for sale took 6.7 months, contractor-built homes took 12.6 months, and owner-built homes took 14.3 months.

Is It Cheaper To Buy a House or Build One?

In general, building your own home is cheaper than buying an existing home. As mentioned earlier, the average cost to build a house is around $300,000. To compare, the national median sales price of a home is $454,900 as of Q3 2022. That’s a significant difference!

Mind you, these are averages based on national data. The total cost of building a home can easily fluctuate by hundreds of thousands of dollars, as do home prices, depending on the location. Speak to real estate agents or developers to learn about the fair market values of homes in your area and how much it’ll cost to build a house. 

Are you ready to start building your own home? BiggerPockets has a whole library of resources to help get you started. Check out our forums and explore our network of real estate partners to discover what options you have available.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.