If you’re in the market for a home, the thought of building your own house may have crossed your mind. Not only does building your own home take you out of the rat race of bidding for a home in a seller’s market, but you get the luxury of building your dream house to spec.
Building a home comes with a multitude of costs, including labor, materials, and land. The costs of all of these elements have risen in recent years along with everything else. The good news is that inflation slowed in 2023 and is expected to continue easing in 2024.
Let’s dive into how much you can expect to spend on building a home today.
Average Cost of Building a House
The cost to build a house (not including land) can range anywhere from $42,000 to $900,000-plus depending on the type and size of the house, where you build it, and how you choose to customize the home. On average, it costs around $329,000 to build a house in the U.S.
When calculating how much it will cost to build a house, you’ll want to consider how many bedrooms you’ll need, since this will impact the square footage and ultimate cost.
On average, building a new house costs $150 per square foot. Here’s a look at the average cost of building a house based on size.
| Home Size | Average Cost to Build |
|---|---|
| 800 – 1,500 square feet (2 bedrooms) | $122,000 |
| 1,000 – 2,500 square feet (3 bedrooms) | $147,000 |
| 1,900 – 2,600 square feet (4 bedrooms) | $285,000 |
| 2,500 – 3,500 square feet (5 bedrooms) | $375,000 |
💡 Quick Tip: SoFi’s Lock and Look + feature allows you to lock in a low mortgage financing rate for 90 days while you search for the perfect place to call home.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
Typical Costs Associated With Building a Home
The lion’s share of your home building expenses will consist of land, labor, and materials. And, depending on market conditions when you decide to build a home, these costs can vary widely. Building a home can take many months and cost hundreds of thousands of dollars. In most cases, these expenses aren’t paid out in one lump sum, and you’ll find yourself having to budget over several months.
If you’re thinking of building a house and want to figure out how to properly allocate your funding over the life of the construction project, it’s a good idea to split the home construction project into individual segments. For ease of understanding, we’ve split construction costs into three phases:
• Preparation costs
• Construction costs
• Post-construction costs
Preparation Costs
Preconstruction costs include the land, the initial costs to assemble a team for the construction project, and fees for permits and reviews that must be completed before you’re approved to proceed.
This phase can take several weeks to months. The timing will usually depend on the time to obtain all zoning and permit approvals as well as the availability of contractors.
Purchasing the Land
Before you can build a home you’ll typically need to buy a plot of land, which can range anywhere from $3,000 to $150,000 depending on the size of the lot and the location.
If you already own the land where you want to build the house, you’ll save a significant amount of the total cost of your new home build.
Water & Sewer Inspection
Local ordinances will require professional inspections of water and sewer lines before you break ground. Not only is this mandatory, but it’s also a good idea to ensure that everything is in good working order to avoid costly future problems with your water and sewer lines.
Getting utility connections professionally inspected can run around $8,400.
Architect and Home Planning Fees
Hiring an architect to create a plan for your home can run around 10% of the total cost to build the home. The cost can range anywhere from $2,000 and $20,000 depending on the complexity of your intended home and the local market. Homebuyers interested in smaller or simpler home plans can cut costs by buying pre-designed stock blueprints for as little as $500 or considering a prefabricated home.
Getting Permits & Approvals
Building a new home requires a building permit and other approvals. The cost of obtaining a building permit varies widely but averages from $1,200 to $2,000, depending on your municipality.
Getting the proper permits and zoning approvals is usually one of the most time-consuming parts of the home-building process. Working with your construction team to obtain these permits as early as possible will help to avoid delays.
Recommended: How Long Does It Take to Build a House?
Construction Costs
Construction costs encompass all the expenses of breaking ground, constructing the framework, and erecting the structure, as well as paying for all the materials and labor.
Erecting the structure and ensuring that all of the utilities are hooked up can take months, depending on how complex your home plan is. To mitigate the possibility of delays, most home construction projects begin in the spring and (ideally) plan to wrap up before the end of fall.
Excavating and Laying the Foundation
If the land hasn’t already been prepared for building, you’ll need to have it cleared, or excavated. This can cost around $2,300. After that, the crew can lay the foundation, which can be as simple as a concrete slab or involve building out a basement, which increases the cost. On average, a foundation costs around $4 per square foot. The average foundation for a new home runs around $8,900.
Putting Up the Frame
The frame of your home makes up its skeletal structure and is vital to its structural integrity. Framing costs will vary widely based on the size of the property, choice of materials, and the market costs for obtaining the materials.
On average, you can expect to pay between $7 and $16 per square foot for framing. The average cost to frame a new house ranges from $20,000 to $50,000.
Installing Electrical
The average cost of installing an electrical system in a new home ranges between $7,000 and $13,000.
This includes the cost of hiring licensed electricians, having them install wiring, outlets, switches, and electrical panels throughout your new home to code. The cost depends on your area, the power needs of your home, and whether you choose to install any bells and whistles like backup generators or solar panels.
Installing Plumbing
The average cost of installing a plumbing system in a new home ranges from $1,500 to $17,500.
Licensed plumbers will install piping throughout your home and connect it to the public water and sewer system. Like the rest of your construction expenses, your plumbing expenses will vary depending on the size of your property. It will also depend on how many water hookups you’ll need, the plumbing materials used (PVC pipes cost much less than copper), and the water capacity of the system you choose to install.
Recommended: 12 Ways to Reduce Your Water Bill and Save Money
Installing HVAC System
Installing a new heating, ventilation, and cooling (HVAC) system in your home can run anywhere from $5,000 to $34,000. The cost of a system that can adequately heat your house during the winter and cool it during the summer can vary widely. Generally the larger your home, the more expensive your system is likely to be.
Installing the Insulation, Drywall, and Flooring
Insulation, drywall, and flooring can significantly add to the cost of building a home. These costs break down as follows:
• Insulation: $3,000 to $10,000
• Drywall: $2.25 per square foot or $15,550 on average
• Flooring: $1 per square foot for synthetic materials (like laminate); $10-plus per square foot or for natural solid hardwood plank
Proper insulation of your home will go a long way toward ensuring that it retains heat in the winter and stays cool in the summer. Installing drywall and flooring gives shape to your home and a canvas with which you can begin to paint.
Expect costs for all three services to fluctuate with the size and location of your home. While drywall costs remain fairly consistent, insulation and flooring costs can vary by geography. If you choose to go with tiles and hardwood flooring in sections of your home, expect to pay a premium for it, especially when compared with linoleum or vinyl.
Roofing
The installation of a brand-new roof costs an average of $8,500, but will depend on the type of roofing material you choose. The standard roofing material is asphalt shingles, which costs around $1.50 to $5.50 per square foot (including installation).
Doors, Windows, and Finishing the Exterior
Finishing the exterior of your new home involves installing siding, trim, windows, and doors. We’ve broken down these average costs as follows.
• Doors: $250 (interior doors); $400 to $3,500 (exterior doors)
• Windows: $150 to $1,500 (depending on the style and window type)
• Exterior siding: $2 to $9 per square foot
• Trim: $1,500
Single-pane windows and doors with cheap weather stripping are more likely to leak cold air in the winter, contributing to higher heating bills. Expect to pay extra for solid timber doors, double-paned windows, and high-tech garage door systems.
Post-Construction
Now that you’ve got your structure in place, it’s time to install the cosmetic finishes that will make your home shine. This includes paint, appliances, lighting, and home fixtures.
This stage is your chance to brand your home with a personality of its own.
Kitchen, Bathroom, & Light Fixtures
Plumbing fixtures include sinks, toilets, tubs, showers, and faucets, and all together can run you around $5,000. Lighting fixtures for a new home can range anywhere from $2,000 to $12,000.
These expenses can vary based on the size of your home, how many bathrooms you have, and the quality and materials of your chosen fixtures.
Painting
The cost of labor and paint required to finish the interior of a new home will depend on the size of the home and whether you choose to paint the interior of your home yourself or hire painters. If you opt to DIY, you could spend as little as $300. If you hire a professional, the cost to paint a house could run as high as $28,000 for a large home with a lot of molding and trim.
Keep in mind that higher-quality paint is usually thicker and lasts longer than cheaper brands.
Countertops and Cabinets
Costs of countertops and cabinets can range from $100 to $1,230 per linear foot depending on materials, quality, and finish.
Expect to pay up for premium options like granite countertops and kitchen islands when compared with basic materials like wood, concrete, and composite. You’ll also typically pay more for custom products than you will for stock items.
Appliances
Appliances like cooking ranges, refrigerators, and washing machines/dryers can cost $3,000 to $15,000-plus total depending on the features you want for each machine.
Just a refrigerator can cost as little as $500 for a basic unit to upwards to $12,000 for a commercial-grade model designed for residential homes. The installation of these machines is fairly straightforward, so expect most of the costs to be for the appliances themselves.
Recommended: Are Home Warranties Worth It?
Landscaping
Landscaping work for a brand-new home costs an average of $8,200.
These costs will need to be paid if you don’t want your property to sit on top of a dirt patch. Ground will need to be moved and your lawn will need to be properly seeded to ensure that it comes in green and even in the spring. These costs can be higher still if you want to add flower beds, new trees, or hedgerows.
If you want the help of a landscape architect to create an outdoor space with curb appeal, expect to pay $70 to $150 per hour.
Driveway
Putting in a new driveway can cost about $4,400. This expense can vary, however, depending on the size of your driveway and whether you opt for gravel or paved. A gravel driveway may cost one-third of what a fully paved driveway costs.
Other Factors That Can Affect the Cost of Building a House
There are a number of additional factors you’ll want to keep in mind when building a home, as they may influence your input costs and long-term home value. They include your chosen area, the size of the house, and market temperature and trends.
Real Estate Trends
These are market-driven trends that you have little to no control over as a homebuyer. They include mortgage rates, the balance between home supply and demand in your area, and the general direction of home prices near you.
Overall, rising mortgage rates tend to hurt demand, as higher rates increase borrowing costs for prospective homebuyers. Your borrowing costs could rise as well if your home building project gets delayed.
Demand and home prices in your area will affect land values as well as the potential growth in your home’s value after you complete construction. Rising home values may drive up the expense of your home building project, and indirectly drive up land costs in your area.
💡 Quick Tip: To see a house in person, particularly in a tight or expensive market, you may need to show the real estate agent proof that you’re preapproved for a mortgage. SoFi’s online application makes the process simple.
Living Expenses and Emergency Costs
According to the U.S. Census Bureau, an owner-built home can take nearly 12 months to complete. While you’ll likely have budgeted your home building costs over that period, make sure to factor in your living expenses as well.
You’ll need to ensure you’ve budgeted enough to feed and house your family for months, with money to spare, should the build be delayed. Construction projects can be delayed for any number of reasons; uncooperative weather is a common one.
In some instances, things like spikes in fuel costs and construction materials can cause unexpected budget increases, particularly if you’re planning on building in a particularly remote area. Getting work crews and building materials out there can cost time and money; expect to be billed for that time.
If you’re hoping to buy and sell at the same time, that takes strategy and timing.
Explore SoFi’s Home Financing Options
Building a home is the ultimate way to get what you want in a dream home. SoFi does not issue construction loans but does offer construction to permanent financing when the property is complete.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Is it cheaper to build or buy a house?
It depends on where you live. Building from scratch can be cheaper in areas where home prices have remained stubbornly high. In some regions, however, buying is more affordable than building.
The states where you can save by building tend to be the West and South Atlantic. In the Midwest, on the other hand, you may be better off buying an existing home than building from scratch.
What’s the lowest possible amount I can use to build a house?
This depends on the location you choose and the cost of labor and materials in your area. You might be able to build a simple tiny house or repurposed shipping container for under $50,000. Keep in mind, though, that you’ll need land to build on, which can cost more than that, as well as all building permits (which can cost up to $3,000).
Is it possible to get a loan to build a house?
Yes, some mortgage lenders offer construction loans to build a house from scratch. With this type of loan, money is usually advanced incrementally during construction, as the home-building project progresses. Typically, you only pay interest during the construction period. Once the construction is over, the loan amount becomes due, and it is converted into a regular mortgage.
Photo credit: iStock/Bouillante
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL0124014