The Ultimate Guide to Building a House: How Much Does It Cost?

Building a house is an ideal solution for many people. You can customize your home to design the perfect space and layout and add the ideal fixtures and appliances. You can start from the ground up creating a building that meets your specifications. 

But how much does it cost to build a house? Homeowners will want to know if they are saving money or spending more than they would buying an existing home. They must also ensure they have enough money to cover the expenses. 

House-building costs vary wildly depending on labor costs, the building process, the square foot measurements, and the median sales price in the area. This article will cover the various factors to provide an average price range for a custom home. 

Understanding the Building Process

To start, homeowners must know what’s involved in the building process. This section will offer a complete overview. 

Home Building Overview

Let’s begin with a rough timeline so you understand the steps involved in building a custom home. 

1. Find Land: First, you will work with a realtor to find the ideal plot of land. There is no saying how long it will take you to find that land, but most realtor contracts are six months. Prices can range from $3,000 to $150,000 depending on the land size, location, and condition. 
2. Undergo Inspections: Next, your lot will be inspected to ensure it can connect to water, sewage, and utilities. Inspections are typically completed within a day, but timelines vary depending on inspector availability. The cost of inspection is typically $8400 but processes can be delayed or become more expensive if issues are identified. 
3. House Plans and Architectural Fees: Next, you will meet with an architect to begin working on the design plans. Design services typically cost between $2000 and $20,000. You can save money by purchasing a stock blueprint, but you may miss out on customized options. 
4. Construction Begins: Once plans are finalized, you can call in a construction team. Construction costs typically account for 15% to 35% of your total home-building expenses ranging between $3000 to $52,000. Processes may be delayed, and expenses can add up due to complications. 
5. Building Permits: Your construction team will tell you which permits you require. You will likely need permits for your plumbing, electrical, other major systems, and the building itself. Total permitting costs are generally around $1200 but they can differ depending on the area. 

Selecting the Right Builder

You must ensure you are working with reliable providers to ensure the desired result. However, your builder may be the most important part of your team. The right builder will ensure your project runs on time and budget and that you get a quality home. 

Look carefully at customer reviews. Hire a builder with expertise in the services you require. Compare estimates to ensure you are making a wise choice. 

Factors That Influence the Cost of Building a House

The cost of building a house can vary wildly. Here are some factors that influence cost. 

Location Influence

You will pay more for a home in an upscale, desirable area. Urban areas tend to be more costly than rural areas because they are closer to more amenities.

It may be tempting to purchase a plot of land in an undesirable area to pay lower prices. But remember, you can always remodel your home on a budget, you can’t change your neighborhood. It may be worth it to invest in a location you are happy with. 

Size and Design Complexity

The bigger the home, the more it will cost. You will pay more for the materials, the labor, and the plot of land itself. 

The complexity of the design will also increase expenses. For example, a one-story home with a few rooms is cost-effective. Expenses increase when adding more rooms, more stories, staircases, attics, basements, and unique design elements like mudrooms, game roofs, and home theaters. 

Material Costs

Materials are another cost consideration. Homeowners who require extensive material and insist on quality will pay a lot for materials. Here are some costs to consider. Labor is included. 

• Framing: Framing is typically solid wood or cinder blocks. It can cost $7 to $16 per square foot averaging $20,000 to $50,000. 
• Roofing: Asphalt shingles cost $1.50 to $5.50 per square foot running around $8500. 
• Siding: Siding typically costs $2 to $9 per square foot but you may pay more for luxury materials. 
• Driveway: A paved driveway addition costs about $4400 but you can save on a gravel driveway which is closer to $1500. 
• Landscaping: Landscapers charge between $70 and $150 an hour to transform an outdoor space. Labor and materials, like trees, gardens, and stone, can run close to $8200. 
• HVAC System: An HVAC system can cost $500 to $34,000 depending on home size. 
• Plumbing System: A plumbing system can cost between $1500 and $17,500 depending on the size of the system and materials used. 
• Electrical System: It may cost between $7000 and $13,000 to hire an electrician to install wiring, switches, and outlets. 
• Insulation: It will cost between $3,000 and $10,000 to keep your home comfortable year-round. 
• Drywall: Drywall will cost about $2.25 per square foot often totaling close to $15,550. 
• Doors and Windows: One window can run $150 to $1500 each depending on the style and type. Interior doors are about $250 each while exterior doors cost between $400 and $3500. 
• Cabinets and Countertops: Cabinet and countertop costs vary wildly based on the quality of materials used. Cabinets can cost $100 to $1230 per linear square foot while cabinets range from $10 to $150 per square foot. 
• Trim: Trim can cost about $1500 on average. 
• Flooring: Flooring costs between $1 and $10 per square foot depending on the materials used. Consider that you will be using different materials throughout your home. 
• Paint: Paint is necessary for interior and exterior spaces. You can spend as little as $300 if you paint yourself. Hiring a professional can cost up to $28,000 for a large home with lots of decorative details. 
• Fixtures: Fixtures like toilets, sinks, showers, tubs, and lighting fixtures range from $2000 to $12,000, all included. 
• Appliances: If you need new appliances, they may cost $3000 to $15,000 depending on features. 
• Furniture: You will want to furnish your home to optimize comfort and aesthetics. Set aside a budget of $20,000 to $80,000 depending on the quality of the type of furniture you require. 

Planning and Budgeting Essentials

Once you have a good idea of what your home needs, you must make a budget. Here’s what budging requires. 

Creating a Detailed Budget

First, choose the best medium for creating a budget. Excel sheets are ideal because they calculate totals and can be edited as needed. However, you may use an app to make the process more efficient. 

For example, Construction Tracker tracks the expenses involved in home building including budgets, progress payments, change orders, and completion percentage. Goodbudget uses an envelope budgeting system that divides your budget into categories. 

Home building expenses can be overwhelming. Consider breaking them down by room, task, or category. 

You should also budget in some wiggle room for possible complications. For example, your construction crew may encounter an unforeseen issue that may increase expenses. 

Additionally, you may need to rent living accommodations while you wait for your home to be built. Include these costs in your budget. 

Balancing Needs and Wants

Your budgeting should involve balancing needs and wants. Determine which items you can’t be without, and which would be nice to have if your budget allows. Doing so will help you prioritize and budget accordingly.

Key Cost Components

Various components add to home building expenses, but key components include land acquisition and preparation followed by labor and material. Let’s gain some perspective on these costs. 

Land Acquisition and Preparation Costs

The first major expense you’ll encounter is land acquisition. A plot of land can run from $3,000 to $150,000 depending on the size of the land and location. 

Next, your construction team will perform an excavation process which entails clearing the land. Excavation typically adds $2300 to the budget. 

They will follow up by building the foundation which costs about $8900 but may be more expensive if you add a basement. Next, they will frame the home, a process, that costs $20,000 to $50,000. 

Labor and Material Costs

Refer to our materials section to determine how much you will spend completing your home build process. Understand that larger homes will need more materials resulting in a more expensive build. 

You will also pay more for luxury products. Consider purchasing products that may not be as luxurious but are still high quality to get optimal value for your investment. 

Building vs. Buying a House

Now you know the expenses involved in building a home. But most homeowners will want to know, is it more or less expensive than buying? Let’s examine the pros and cons of each. 

Comparison of Costs

It is generally more expensive to build a home than to buy one. The average cost to build a 2560-square-foot home is $520,500. According to BankRate, the median price of an existing home is $387,600.

However, building a home gives you more control over your budget. For example, you may save money by purchasing low-cost land, fixtures, and materials. However, you may also encounter unforeseen issues that add to expenses. 

If you live in an expensive area, home averages may be well above $520,500, but you are also likely to pay more for the land, materials, and labor necessary to complete a home build. 

Making an Informed Decision

You may decide you would rather buy than build based on cost alone. However, there are benefits of building your own home that go beyond budget. Here are some to consider: 

• You can customize your home to ensure it’s perfectly suited to your needs. 
• You can design your home for optimal energy efficiency helping to offset some of the costs. 
• A new home features new fixtures and design elements that require less maintenance. 
• You will face less competition from other buyers. 
• You have more control over how much you spend. 

Conclusion

Building a home is a huge investment but it may be worthwhile to enjoy a customized living space. Now that you know the expenses and pros and cons, you can decide if it’s right for you. Think about what your budget will be and your desired outcome to see if its building is suited to your needs. 

Regardless of what you decide, World CopperSmith can be there every step of the way. We offer luxury customizable fixtures and furnishings that will enhance your home aesthetics. Contact us to learn more about what we have to offer.