Mortgage Dove

What is the Average Cost to Build a House?

You might have thought of building your own house instead of buying a house  after spending hours looking at homes online. Building your own home has many advantages. The main one is that you have the freedom to create the house of your dreams. The question is: Can you afford it?

The cost to build a house

HomeAdvisor reports that the average cost of building a house  in 2022 was $282,299 as of February. It may seem like a lot, but it's still less than the median home sale price of $400,600, as per the U.S Census Bureau and U.S Department of Housing and Urban Development.

Will it be more affordable to build a house than to buy one? Not necessarily. It is possible to have very different costs for building a custom home depending on what you choose, how much labor you pay, and where you live. While $282,299 is an average cost, homeowners typically spend between $114,209 to $450,824 on their homes. Remember that you will also need to purchase and prepare the land where you will build your own house.

The average cost of building a house

National Average


 Minimum (800 square feet)


 Maximum (5,000 square feet)


 Average Range

 $114,209 – $450,824

(Source: HomeAdvisor)

A breakdown of the average cost to build a home

Let's look at each step in the home-building process. We will also break down the average cost of each one. These costs can change depending on the demand for materials, labor, and land. Due to high demand, building materials costs have risen during the COVID-19 epidemic. Prices rose 5% to 10% in 2021 alone.

Land Preparation and Buying ($80,000)

You will need to buy a piece of land and have it cleared before you can build your house. It could include tree removal or having the land leveled. The costs to purchase an empty lot  vary depending on many factors such as the lot's size and location.

According to HomeAdvisor data, the average cost for land purchase is $76,500. Rural lots can be purchased for as low as $3,000. It is possible to expect to spend anywhere from $1,500-$3,000 on the preparation of the land before you start construction.

Drawing up Plans and Getting Permits ($7,200)

Once you have your land, your general contractor and subcontractors will begin preparing for the building of your house. This stage involves having an architect design the floor plans for your home and obtaining all permits . House plans are typically priced at $5,000.

However, the cost of your house plan will depend on its complexity and whether you need any building permits or preliminary inspections. Although building permit requirements vary from one location to another, they are generally around $2,200.

Preparing and Building the Foundation ($14,500)

Once all of the preparation work has been completed, it is time to break ground. A crew will arrive and start digging for the foundation of your home. They'll then pour concrete according to the type of foundation you have: slab, crawlspace, or basement. A concrete slab foundation is typically the most affordable, followed by a crawl space foundation that's slightly more costly and a basement foundation.

Your budget and your preferences will determine which foundation you choose. Every foundation has its pros and disadvantages, so do your research. It will cost an average of $14,500 to prepare and build your foundation.

Framing the Home ($35,000)

This step is similar to building the skeleton for your home. The floor will be framed and covered with plywood. The walls will be raised, framed, and covered with plywood. Next, the trusses for the roof will be built and placed on top. This process can cost anywhere from $20,000 to $50,000 depending on the size of your home and floor plan. The average cost is around $35,000.

Installation of External Elements ($50,000)

After the skeleton has been built, exterior finishes such as siding will be installed on the walls. Next, windows and doors will go in. Finally, the roof will then be sheathed and covered with roofing felt. It will cost approximately $50,000.

Installation of Plumbing and Electrical ($52,500)

This stage will see the installation of plumbing and HVAC systems. An electrician will then wire your home and connect you to the power grid. This step does not include fixtures. It is all about setting up pipes and ducts. Installation costs for major systems average $52,500.

Interior Finishes ($112,500)

The interior finishes include insulation, drywall, and flooring. The countertops and cabinets will be installed, walls will be painted, and appliances will be connected.

It is often the most costly part of home construction. The exact cost depends on your individual preferences. Interior finishes are expected to cost approximately $112,500 on average. However, if you have more expensive tastes, they might cost significantly more. Your home will be complete once this step has been completed.

Finalizing Additional Items ($20,000)

It includes any additional details you wish to make to your property. Any extensions to your house can also increase the cost. Additions  to your yard such as fencing or driveway paving will run you between $2,000 and $5,000. After everything is completed, the work areas must be cleaned up and all inspections completed. It could cost as much as $20,000.

Additional Considerations for Building a House

Remember that these average construction costs do not include all jobs. Therefore, when you are deciding on your building budget, it is important to do your research to find estimates for all of the tasks that will be required to build your house.

Construction costs can vary greatly depending on the availability of materials. You can get more precise quotes to figure out what house you can afford  and the square footage. It's a good idea, however, to allow yourself some extra cash in case things turn out to be more expensive than you initially anticipated.

Costs to build a house based on size

The size of a home is a major factor in determining its cost, particularly the cost per square foot. Below is a breakdown of the average price for a new home, based on popular house sizes. The new single-family home was approximately $2,000 to $3,000 square feet in 2021.


Average Cost Range

800 sq. ft.

$80,000 – $160,000

1,000 sq. ft.

$100,000 – $200,000

1,200 sq. ft.

$120,000 – $240,000

1,500 sq. ft.

$150,000 – $300,000

2,000 sq. ft.

$200,000 – $400,000

2,500 sq. ft.

$250,000 – $500,000

3,000 sq. ft.

$300,000 – $600,000

Cost to build a house and the factors that influence it

Although we have tried to provide the most current information on the average cost of building a house, it is difficult to predict the exact cost of your new home construction project. For the best construction estimates, you will need to research the average price in your area.

The availability of labor and materials in your area, as well as the quality and types of the materials, can all impact the overall cost. The type of house  that you are building will also affect the price. It is possible to build a small, simple home for a reasonable price . Luxury homes with many stories and architectural details will naturally be more costly.

When should you build your own house or buy a home?

Trying to decide whether you should purchase an existing house or build your own home? You should consider many factors.

The process of buying an existing house  is usually simpler than building one. While a new home can take several months to build, the process of buying a home can be completed in as short as one to two months. Building a home is often stressful and requires a lot of decision-making. A home purchase might be the best option to save yourself months of hassle. A mortgage can be much easier than obtaining a construction loan.

However, you can build your home and get all you want. Home buying requires that you make many compromises. You won't have the expense of costly repairs if your home is well-built.

How Can You Afford to Build Your Own Home

Although potential home buyers may be eligible for a mortgage loan to finance their purchase of an existing house, builders who are hopeful of building a home don't usually have the same options. A traditional mortgage is not typically available to fund the home construction.

A home construction loan is what you need if you don't have enough cash. These loans are short-term and can be used to finance the construction of a home. Once the construction is complete, you can convert your home construction loan into a traditional mortgage loan. A construction-only loan can be obtained to cover the cost of construction. Once the project is complete, you can apply for a traditional loan to repay the loan.

"Mortgage Dove makes home financing convenient for every American. You can count on us to provide a home buying experience tailored to your personal needs and financial situation. We strive to give you the peace of mind that your home financing goals can be achieved.”


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