The Average Costs of Building Your Own Home

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This article takes an in-depth look at the costs of building your own home and the pros and cons. 

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Pros and Cons of Building Your Home



  • Customize every detail

  • Pick the location

  • Add upgrades, like a half bath or media room

  • It is a chance to build your dream home

  • Everything will be brand new

  • Save money with energy-efficient items

  • Can be a year for your home to be completed.

  • Is time consuming

  • Can be more stressful

  • More expensive than buying pre-built

Average Costs vs. Actual Costs

These averages are great to keep in mind, but they might not bear much resemblance to what it will cost you to build the home you have in mind.

The specifics of your situation could vary dramatically from the average, making your actual home costs significantly lower or higher than the average.

What Factors Affect the Overall Cost of Building Your New Home?

Many variables contribute to the final price of building a new home. This checklist will help you understand some of the major contributing factors.

The Lot You Buy:

The NAHB reports an average cost of $85,139 for a buildable lot. This figure includes the costs associated with financing it.

The area of the Final Home Site You Decide On:

Before you build on your lot, it may need to be leveled. Access to the building site may pose challenges; it depends on whether roads to the property exist and their condition. Excavation costs vary depending on the site and local labor costs.

The Home’s Foundation:

The NAHB estimates an average total of more than $33,400 for expenses relating to the home’s foundation. This sum includes excavation, retaining walls, and other necessities.

The Square Footage of the Home You Want to Build and the Number of Stories Required:

Multi-story homes cost more than single-story homes; larger homes tend to cost more than smaller ones.

The Home’s Walls:

The NAHB estimates an average cost of $11,744 for drywall.

The Home’s Windows and Doors:

Doors and windows are a significant expense. reports an average cost of about $5,000 for window installation. The NAHB estimates a cost of $12,000+ for windows, doors, and garage doors in a new home.

The Roof on the Home:

The NAHB reports an estimated average cost of about $10,000 for roofing on a newly built home.

The Home’s Siding:

Your choice of siding makes a significant difference in the home’s overall cost. If you’re planning to build a home valued at more than $750,000 US dollars, reports that stucco and brick siding is generally the top choices to consider. reports that stucco adds to a home’s cost at a rate of $6-$9 per square foot based on an increment of 1,000 square feet. Brick and stone veneer costs between $11-$15 per square foot.

Vinyl siding is a lower-end choice that costs around $4 per square foot to install. For lower-priced homes, vinyl has been the most popular choice for siding in the recent past.

However, vinyl siding lost market share overall between 2010 and 2014, while brick gained market share during the same time frame.

Brick siding is expected to continue growing in popularity and beyond, so brick siding may be worth the investment in custom-built homes even at the lower end of the market.

The Home’s Flooring:

Expect to pay between $9 – $12 US dollars per square foot for hardwood flooring. If you prefer wall-to-wall carpeting, a realistic price range is $3 – $5 per sq ft. $13,000+ is an average total estimate for flooring based on NAHB data.


Expect to pay $12,000 or so for your home’s plumbing system.

The Home’s Electrical System:

Setting up electricity to the house will set you back another $12,000 or so.

The Kitchen:

Countertops, Appliances, Cabinets, Fixtures, and Hardware: You could realistically expect to spend somewhere around $16,000 just for the countertops and cabinets. The appliances can add up to around $5,500 on average.


NAHB data gives an average estimated cost of $12,623 for heating, ventilation, and air conditioning.

The Exterior Details Like the Landscaping, Garage, Driveway, Deck, Patio, and Sprinkler System: If you don’t want your home to be situated on a dirt lot, you expect to pay around $6,000 for landscaping.

A driveway typically costs another $6,000 or so. A deck, patio, or porch could cost around $4,000, give or take, depending on the features you want.

Now you have an answer to the question of “how much does it cost to build a house?” We hope this information has given you real insights into the average cost of building a house.

Now have a clearer understanding of the factors that could affect your final costs if you follow through with building a new home.

What is the average cost to build a house?

According to the National Association of Home Builders, the cost to build a house is usually more than buying an existing home. This is not always the case, but most of the time, it is more expensive to build than buy. The cost to build a home will depend on many factors.

  • The size of the home – How many square feet is the house you’re building.
  • The design of the house – A home with a simple design will cost less. For houses with lots of corners, rounded walls, curved staircases, etc. will add to the cost.
  • Materials used – If real wood, granite, crown molding, fancy sinks, etc., is used, it will also increase building costs.
  • Upgrades – You will have to pay a premium to add your choice of paint, tile, carpet, even extra bedrooms or bathrooms that can be added for a price.


How Long Does It Take to Build a House?

When you build your own house, it’s typical to take up to one year to complete. There are quite a few steps to take, and each step in the process can be time-consuming on its own. When you add the time needed for each step, you’ll conclude that the process is not a quick one.

Before you can move into your new home, you must buy a lot to build on, decide on a design for the home, create blueprints, work with builders, get a loan, get the work on the house completed and decorate the home.

Building a house in a Planned Community

Planned communities are where most people choose to build a home. There are a few different home builder’s in a community; each one usually has its own model home as the office. This is where you can look at the model home and look at the different home designs they offer.

Each design is set in stone for the most part. However, you can add a bedroom, bathroom, media room, or powder room in some cases. You will be able to choose the lot you want and the home design. You will also go to the home builder’s showroom to pick out all the upgrades you want.

Having a house design already set makes it much easier and cheaper than buying a custom home.

Do I need to get a home construction loan if I build a house?

Not necessarily; a construction loan works similar to a line of credit. Once approved, you will have the money in an escrow account to use as needed when you build. A home construction loan is only required if you hire a custom home builder to build a house in your lot.

If you use a home builder, you can get an FHA loanVA loan, or conventional loan to purchase the house. The home builder will require a pre-approval letter and a 1-2% deposit to start construction. This deposit is non-refundable but goes towards your down payment on a loan.

FHA loans require a credit score of 580 and a 3.5% downpayment. VA loans require no downpayment at all, and the credit requirements for VA loans are flexible.

You will need to get your loan lined up before the home is completed. Once your house is ready, you will continue with a mortgage like any other home.

Average price per square foot

The latest available data from the National Association of Home Builders gives us insight into the average cost per square foot of single-family homes in 2015.

They report an average sum of $289,415 US dollars, and their reported construction cost per square foot for the same year was $103. The NAHB also reports an inflation rate of slightly more than 4 percent for 2013-2015.

Data from the US Census Bureau reveals that the median size for a single-family home in the USA was 2,467 square feet as of 2015.

If you add about 4 percent per year to cover inflation, the price per square foot would be about $111-$127 in 2017.

That means an average cost for a 2,467 sq ft home could be expected to be in the neighborhood of $313,309 US dollars in 2017. reports a slightly lower average cost of $305,372, but their math was done using a smaller 2,000 square foot house. They report an estimated average price per square foot of $150 US dollars for 2017.

They suggest that most homeowners should expect to budget between $178,010 and $466,493 US dollars when building a brand new home.

Buy vs. Build: Which is Better?

Whether it is better to build a house or buy a house depends on each person’s needs. When you buy an existing home, you can move into it right away, usually within 30-45 days. However, the design and materials used in the house are generally not what you would pick.

You may have to change the wall colors, sinks, tile, and carpet to make it feel more like yours. Existing homes are also older; there may be cracks in the paint and walls, worn out sinks or toilets, or even popcorn ceilings. Many times buying an existing house won’t feel like a new house.

When you build a house, you get to pick out all the colors, types of carpet and tiles, cabinet design, and more. Also, everything looks and feels brand new. A new house should be in perfect condition when you move in.

You won’t have to worry about the appliances, toilets, or water heater going out, at least not anytime soon. However, you will be waiting for 5-12 months for your new house to be completed.

There are many factors to consider when thinking about buying a new or used house.

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Frequently Asked Questions

What is the average price per square foot to build a house?

The average price per square foot is approximately $111-$127. However, the price per square foot will depend on the house’s design and the house’s area.

A home in California will have a higher price per square foot than a house in Dallas.

How much does it cost to build a house?

To figure out the total cost of building a house, you need to multiply the estimated square footage by the average price per square foot for your area. If we use $125 as the cost per square foot, you will get the figures below.

For example:

  • 2000 square foot house = Approximately $250,000
  • 3000 square foot house = Approximately $375,000

Do I need a construction loan when I build a house?

You only need a construction loan if you are using a custom builder to build on your property. If you are like most people, buying a house in a planned community. You can use an FHA, VA, or conventional loan.

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