Building A House: A Breakdown Of How Much It Costs

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If you’ve spent hours browsing homes online and in person but haven’t found the one for you, you may have considered giving up on buying a house altogether and opting to build your own place from the ground up.

Building your own house can come with a lot of benefits, the main one being that you have the opportunity to get exactly what you want and create a dream home with all of your must-haves – assuming you can afford such a property.

How Much Does It Cost To Build A House By Size?

The average cost to build a house in the U.S. is $317,786. This figure is less than the average home sales price, which was $501,700 in July 2024, according to data from the Federal Reserve Bank of St. Louis.

So, is it cheaper to build a house rather than buy one? Not necessarily. The total cost of building a custom home can vary quite a bit depending on the choices you make, the building materials you use, labor costs and the region of the country you’re in. Though $317,786 is the average, the typical cost of building a home is in the $138,523 – $525,406 range.

You’ll also need to buy and prepare the land where the home will sit. The prices above don’t factor in these extra costs.

Average Cost To Build

Source: Angi

A Breakdown Of The Average Cost To Build A House

If you’re wondering how expensive it is to build a house, it can help to see a breakdown of the cost at each stage of the home building process. While these costs can fluctuate with demand for land, materials and labor, breaking the costs down will give you a better idea of what to expect when building a home.

Buying And Prepping Land

Before you can build a house, you need to find land to build it on. Not only will you have to purchase a plot of land, but you’ll need to have it cleared. This can include tree removal and having the land leveled.

The cost of purchasing an empty lot will hinge on several factors, including the size of the lot and its location. The average cost of purchasing land varies widely depending on state and location, but nationwide you can also expect to spend $1,600 – $6,200 on surveying and land preparation before breaking ground on construction.

Drawing Up Plans And Getting Permits

Once you have your land, your general contractor and subcontractors will start preparing to build the house. This stage includes purchasing all the necessary permits and an architect drawing up floor plans for the home.

On average, house plans can cost anywhere from $500 – $20,000. However, the exact cost will vary with how simple or complex your house is going to be and the building permits and preliminary inspections you may need.

Building permit requirements will differ between locations, but they cost $150 – $2,000 on average. Keep in mind you might need additional permits for things like sheds and patios.

Prepping And Building The Foundation

After all the prep work is complete, it’s finally time to break ground. A crew will come and begin digging out a space for your home’s foundation. Then, they’ll pour the concrete according to which type of foundation you’ll have: slab, crawl space or basement.

The foundation you choose will depend on your budget and preferences. Each type has pros and cons, so be sure to do your research. A concrete slab foundation is customarily the most frugal option. A crawl space is more expensive, with a basement foundation being priciest of the three.

Prepping and building your foundation will cost around $9,000 on average, though this amount can be significantly more or less depending on the size of the home.

Framing The Home

Next up is framing. Think of this step as building the skeleton of your home. Floors will be framed and then covered with plywood. Walls will be framed, raised and then sheathed with plywood or oriented strand board. Then, the trusses that will frame the roof are built and placed on top of the wall frames.

This process will cost $20,000 – $50,000 (depending on size and floor plan), averaging around $35,000.

Installing External Elements

Once the frame is built, all the necessary external elements of the walls, roof and openings will be installed. This means that exterior finishes such as the siding will be put up on the walls. Windows and doors will then be added, after which the roof will be sheathed – covered in roofing felt and nailed-on shingles. This can cost somewhere in the $25,000 – $60,000 range.

Installing Plumbing And Electrical

Now it’s time to install all the major systems that make your home hum with water, air and electricity. At this stage, plumbing and HVAC systems will be installed, and an electrician will wire your home and get you connected to the power grid.

No fixtures will be added at this time; this step is about getting behind-the-scenes stuff such as pipes and ducts set up. Major system installation can cost anywhere from $30,000 – $75,000.

Adding Interior Finishes

Next are the interior finishes. This includes adding insulation, drywall, flooring, interior doors and all the basic components that will turn the newly constructed structure into a livable home. Cabinets and countertops will be installed, walls will be painted and appliances will be hooked up.

Lighting and any fireplaces are also common interior finishes.

Interior finishes can easily be one of the most expensive parts of the home building process, and the exact cost will depend on your personal preferences. Interior finishes could cost on average $50,000 – $175,000 depending on your choices. Once this step is finished, your home’s construction will be all but complete.

Outdoor Space

The final step includes any other additions you want made to your property. These might include landscaping, outdoor spaces and other features. An outdoor living space typically ranges from $4,150 – $11,190 in cost.

Outdoor Living Features

Of course, special features have the potential to elevate the cost of your outdoor space by a significant amount. On average, a large outdoor deck will cost around $8,184. If you’re looking for a smaller deck, this cost could decrease with the materials and labor involved in the building process.

In-ground pools, on the other hand, can cost anywhere from $19,000 – $130,000, while outdoor kitchens cost on average $16,307.

Factors Affecting The Cost Of Building A House

It’s important to note that all of the costs discussed here are approximations based on national averages, and the costs are subject to change under various conditions. For the most accurate construction costs, you’ll need to do some research into the average prices in your area and get estimates from local contractors.

Your overall cost can be affected by an array of factors, including:

• Current real estate trends
• The availability of materials and labor
• The type and quality of the materials you choose

The total price you pay will also be determined by the type of home you’re building. A very simple, small home can be relatively affordable to build. A more high-end, luxury home with multiple stories and architectural flourishes will naturally be much more expensive for aspiring homeowners.

When To Consider Building A House

Weighing whether you should buy an existing home or take the plunge and build your own? Many important factors are worth considering.

The Length Of The Building Process

Compared to building a house, buying an existing one off the market is typically a much simpler and faster process. New homes can take several months to build, while the home buying process can be completed in as little as 1 – 2 months.

Additionally, building a home usually comes with plenty of stress and lots of decision making. If you’re looking to spare yourself months of headaches, buying a home might be the easier option. Purchasing an already-built house can also be easier because you don’t have to deal with finding a construction loan.

Customization And Quality

On the other hand, building your own home gives you the opportunity to get everything you want, while the home buying process often requires you to make a lot of compromises. Plus, as long as your home is well-built, you won’t have to worry about dealing with costly repairs right away like you might with an older house that could need a roof replacement or a new HVAC system.

A newly built home means you have all-new components, which, unlike an existing home’s older components, are likely to last for years.

How To Afford Building Your Own Home

If you don’t have the cash to fund your home build, you’ll need a home construction loan. This is a short-term loan used to fund the building of a new home. You can get a home construction loan that converts to a traditional mortgage loan once the construction has been completed.

You can also get a construction-only loan that covers the costs of construction. Then, once the project is completed, you’ll need to apply for a traditional mortgage to pay off the construction loan.

Rocket Mortgage^® doesn’t offer construction loans at this time.

Should You Build Or Buy A House?

The decision of whether to build or buy a home is entirely yours and one you should make based in part on your finances and the amount of money you’re willing to spend. While building a home is the best way to have a place that checks all the boxes, it could get expensive and take a long time. Estimate the costs for building versus buying a house to figure out which option works best for your situation.

The Bottom Line: Calculate The Cost Of Building A House

While the average cost to build a house is $317,786, most people will typically spend anywhere from $138,523 – $525,406 to build a home – and the average cost to build a home doesn’t include the land purchase and land preparation, which make the overall price significantly higher. Even though you can get a general idea of how much you might pay, keep in mind that numerous variables will impact the cost to build.

There’s also more to consider than cost. You’ll want to weigh the customization that comes with building a new home against the convenience of buying something preexisting. Although the process of securing financing for a preexisting home might feel intimidating at first, it’s much simpler than building a house from the foundation up.

If you decide to buy a home rather than build, you can start your mortgage application online today.