Sometimes it’s difficult to find the perfect house in the perfect location at the right price, such as in a low inventory market such as the one we are experiencing now. In these cases you may be interested in exploring the option of building a new home.
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 (not including the cost of the land). According to the U.S. Census Bureau, the median price for a contractor-built single-family home in 2021 was $343,600 (again not including the land).
The truth is your new home’s price tag will vary depending on where you live (the cost of land, permits, tapping utilities, etc), the size of the home and type of home (a single-story home will cost more to build than an equally sized two-story home) , the materials used, the labor required, as well as several other factors.
Let’s break down all of the main variables you’ll encounter when building a home and how much you should expect to pay.
Average Cost To Build Per Square Foot
It should come as no surprise that the biggest cost factor is the size of your house. More house = more materials and labor costs.
On average, the cost of building a house is $170 per square foot. If you assume it’ll cost you $140 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||$84,000 – $120,000|
|1,000||$140,000 – $200,000|
|1,200||$168,000 – $240,000|
|1,500||$210,000 – $300,000|
|2,000||$280,000 – $400,000|
|3,000||$420,000 – $600,000|
|4,000||$560,000 – $800,000|
|5,000||$700,000 – $1,000,000|
Another variable that’ll impact your cost is the size of your home’s footprint. Generally, it’s cheaper to build up than to build out. Thus if you’re looking to build a home and are looking to keep your costs down, consider making it 2-3 stories to decrease your footprint. This decreases the size of the home’s foundation and roof while also decreasing the size of the lot your home will require.
Costs By Location
Before we get into the building costs, note that building a three-bedroom home in San Fransico, California will cost a lot more than building the same home in the suburbs of Columbus, Ohio.
The cost of land itself depends greatly on where you live. In 2020, the National Association of Home Builders revealed that the median price for a lot was $53,000. However, the median lot price in Central Ohio is currently around $265,000 (you can find lots starting as low as $20,000, or well over $800,000 on the high-end). Depending on your lot, you’ll also have to budget for land preparation costs, which range from $1,300 to $5,100.
Local regulations will also impact your cost estimates. Different cities, counties, and states have 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.
Pre-construction costs are expenses that must be sorted out before you can break ground. These costs include land, land prep, utility connections, architectural plans, permits, and more.
Purchasing and prepping land for construction
To build a home, you need suitable and to place it on. An often overlooked cost associated with the construction of a new home 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 $100,000 for a small parcel in a populated area but as low as a few thousand dollars in a rural area.
Then, you’ll need to prep the land, which means tree removal, grading, and anything else that’s required. These costs can amount to somewhere between $1,000 – $100,000 or more, depending on the scale of the project.
Finished or unfinished lots
Finished lots include sewer, utilities (water, gas, and electric), and access to cable / internet providers. 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 place concrete to connect your property to a road, which can bring a whole new set of costs. Paved driveways usually start at $4,500 – $9,000 (asphalt is a less expensive option that concrete however, it requires frequent sealing and you’ll want to insure the installer lays this thick enough), gravel is a less expensive option but again requires additional maintenance (additional gravel will need to be laid every few years).
Purchasing a floor plan
Once you know where you’re building and how large you want your home to be, the next step is to locate an architect to draft a custom set of plans, or you can purchase a set online. Whether you’re looking to build a classic Georgian style home, or a soft contemporary, there are plenty of pre-designed floor plans to choose from. These designs come with plenty of features homeowners want in a home, so you can save money by selecting a stock plan. These plans usually cost between $500 – $5,000 and these can be customized if needed.
Again if you prefer a completely custom home you can pay a premium and hire an architect to draw up a plan, but be aware that this costs significantly more.
Building permits and local fees
You can’t start the home building process without a building permit. Building permits usually cost between $1,200 – $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
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 slab foundation is around $8,000, and even more if you plan to include a basement.
The frame is your home’s skeleton, and it’s usually made of wood. The frame is built first, then supports finishing features such as your roof, doors, windows, and drywall. Most framers also install the window and doors and do your home’s subfloor installation and sheathing.
On average, framing will cost $25,000 – $45,000.
The cost of a roof varies depending on the type of material you opt for. On average, a traditional asphalt shingle roof will cost around $7,000-$10,000, but that number can climb if you need a larger roof or want a different style.
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 vinyl siding will cost around $12 per square foot but can become increasingly expensive with different materials such as stone or brick.
Interior Material Costs
HVAC, electrical, and plumbing costs
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.
- HVAC: $5,000 – $10,000
- Electrical: $3 – $5 per square foot
- Plumbing: $2,000 – $15,000
On average, when combined, these three components of your new home will cost anywhere between $15,000 and $75,000.
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
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 tighter budget, this is one of your best opportunities to save money. If you’re looking for luxury, your interior finished could become the most expensive aspect of your home build. On average, interior finishes range from $50,000 to $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 – $1,350 per door
- Windows: $150 – $400 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
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 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
Saving Money By DIY
If you have the skills and time to take on any of these installations, you can significantly reduce the total cost of building a house. 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 remedy mistakes and repair or 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, contraction-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, it’s cheaper to buy an existing home than to build your own home. The average cost to build a home here in Columbus is around $360,000. To compare, the median sales price of a home in Central Ohio as of Q3 2022 stands at $280,000, while the national median sales price of a home is $454,900.
Mind you, these are averages and again in this low inventory market the time required to find the right home and beating out other buyers and actually getting one of these into contract are additional considerations. But the total cost of building a home can easily fluctuate by hundreds of thousands of dollars, as do home prices, depending on the location.
If you’re interested in exploring the option of building a home in Central Ohio we would invite you to give us a call to learn about the fair market values of homes in your area and how much it will cost to build one.
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley 43209 Columbus 43201 43206 43214 43215 Delaware 43015 Downtown Dublin 43016 43017 Gahanna 43219 43230 Grandview Heights 43212 Galena 43021 Hilliard 43026 Lewis Center 43035 New Albany 43054 Pickerington 43147 Polaris Powell 43065 Upper Arlington 43220 43221 Westerville 43081 43082 Worthington 43235