How Much Does It Cost to Build a House in 2023?

Building a House by Square Footage

The most significant cost determinant? You guessed it: It's the size of your dream home. Simply put, the bigger the build, the more material and labor costs you should expect. The cost to build a new house is about $150 per square foot, and the average new home constructed in the U.S. is approximately 2,200 square feet. 

If you'd like to know the general price range of your dream build by size, take a look at these averages below. A simple omission like an extra bathroom or pantry can greatly affect your pocketbook.

The house footprint will also impact the total project cost. If you're looking to save money, opt for a small footprint rather than building outward. For example, building upward with a two-story design can decrease the footprint. Where you build can also play a big role when it comes to costs, which we'll explore later.

Number of Bedrooms

In the U.S., three-bedroom homes typically range from 976 square feet to over 2,400 square feet. Four-bedroom homes range from 1,900 to 2,800 square feet, and five-bedroom homes range from 2,500 feet to the mid-3,000s. The table below gives you a sense of the home cost by the most common bedroom sizes.

Building a House by Location

Metropolitan settings like New York City or San Francisco have a higher labor cost, so builds in these bigger cities can run $400 per square foot or more.

Building a House by Labor

Besides square footage, the construction pros who build your house represent 30% to 50% of your project costs. As you might guess, the labor costs vary relative to the size of your house, your contractor's buying power, and their ability to get reasonably priced labor. These factors are on top of the size and complexity of your home.

Large custom-built homes have a higher labor cost than smaller modular homes. Modular properties are prefabricated, with up to 90% of the work done off-site in a factory setting before it's shipped to its final destination and assembled. Large custom builds are constructed from the ground up on-site with no prefabrication. The lack of factory-made elements significantly increases labor costs. 

Some labor costs (not including material fees) include:

• General contractor cost: 10%–20% of the total project cost

• Architects cost: $125–$250 per hour

• Structural engineers cost: $100–$200 per hour

• Draftspeople cost: $50–$130 per hour

• Interior designer rate: $50–$200 per hour

• Landscape architect fee: $70–$150 per hour

• Construction manager cost: 5%–15% of the total project cost

• House framer rate: $7–$16 per square foot

• Electrician rate: $50–$100 per hour

• Plumber cost: $45–$200 per hour

Before Building a House 

You can't build a home without buying the land first. The average lot size of a new single-family detached home sold in 2016 was 8,562 square feet, just under one-fifth of an acre. While there aren't many rules on how much land you have to buy, think about the overall home size, including the backyard and front yard. You also need to set aside space for fencing on your property line and where your home's utility grid will go. 

Land Purchase

On average, purchasing your own lot costs anywhere from $3,000 to $150,000. Pricing varies significantly depending on the lot size, location, and whether utility connections are already at the site.

In 2020, the National Association of Home Builders reported that the median lot price reached a record high of $53,000. The most expensive lots were in the New England region, where the median lot values reached $120,000, and the second-most expensive area was the Pacific region, with a median lot value of $103,000.

Clearing land for construction prep costs around $1,300 to $5,100. If you bought your own lot, you might have to hire an excavation contractor near you to clear it, but the land might already be prepared for building in most developments. Costs you may incur include:

• Soil testing cost: $800–$2,100

• Land excavation and grading cost: $1,500–$5,600

• Land surveyor cost: $400–$750

Finished vs. Unfinished Lots

If no utility, sewer, or cable lines have been pulled to a site, it's considered an unfinished lot. You'll usually only run into this issue in rural areas. If you buy land in a metropolitan setting, developers will probably have finished the lot prior to listing it. When building on unfinished lots, plan for some additional costs, such as:

• Connecting to city sewers cost: $550–$2,300

• Connecting to the city electric grid cost: $1,000–$30,000, depending on how close your home is to the nearest lines

• Connecting to city water lines cost: $1,000–$5,000, with one fee for both water and sewer

Plans and Permits 

Whether you're looking for a small two-bed country-style property or sprawling modern farmhouse, you can find a variety of stock plans or pre-designed home plans with features homeowners typically want. Expect to pay $500 to $5,000 for stock plans that'll give you an overall vision of a home while saving you architectural fees. Custom plans will require an architect and can cost anywhere from $2,000 to $20,000. These plans are tailored to the exact vision of the buyer. 

Once you've purchased your chosen house plan, give the "bid set" to your builder. The bid set consists of all relevant plans, including elevations, wall sections, and floor plans. Based on this, your local construction manager can give you an accurate "cost to build" estimate.

To build a new home (or add to an existing house), you'll also need a building permit. The cost of a building permit for a home is between $1,200 and $2,000. Permit costs can vary based on your location and the permitting requirements in your area.

Building a House by Construction Type

Constructing your home from scratch can be a costly and time-consuming process. Below, we break down the most significant elements of building a home, from the materials needed to framing and plumbing requirements.

Materials

Expect to spend about 50% of your total budget on home-building materials. Lumber costs an average of $25,000 to $65,000 nationwide. For a new build, concrete costs about $1,000 to $10,000. Flooring typically costs $1 to $5 per square foot. 

The quality of the material you choose makes a big difference. For instance, siding costs about $2 to $15 per square foot. But if you're working on a tight budget or want to splurge elsewhere, you can clad your home in lower-end vinyl, wood, or aluminum siding for $2 to $5 per square foot. On the other extreme, you could also use high-end stone for $35 to $50 per square foot. Your pro should be able to give you an estimate based on your design.

Framing

The frame of your house is the skeleton that'll support your finishing features, like drywall, windows, doors, and even your roof. It's the backbone of every house and is traditionally made of wood. Framing costs $20,000 to $50,000. If you don't live in a cold climate, ask your builder about using cinder blocks, a great way to save money. But be forewarned: It's not a great insulator. 

Your home's frame will dictate the size and location of rooms and other essential features like roofing. Framing includes the home's overall frame, trusses, and general metalwork. Usually, framers also do the home's sheathing and subfloor installation and install the windows and doors. 

If you want to make changes after the framing has begun, it'll increase the price. Increases depend on many variables specific to each project, creating a general estimate for this guide impossible. Even seemingly simple changes like adding a door, moving the window's location, or adding loads to a second floor all affect the final bill. If you want to keep your costs lower, avoid these kinds of changes.

Plumbing, Electrical, and HVAC

Plumbing, electrical, and HVAC comprise most of your major system costs because of the sheer volume of work and labor-intensive nature required in each of these areas. Major systems installation costs range from $30,000 to $75,000. Plumbing, electrical, and HVAC work are critical to your property's safety, integrity, and efficiency, so this isn't the place to try and cut costs. The size and type of systems can affect the price of these installations.

For example, a new HVAC unit installation costs around $5,000 to $10,000. Here's a look at more costs associated with major systems:

• Rough-in plumbing cost: $7,500–$15,000

• Electrical wiring cost: $20,000–$30,000

• HVAC cost: $1,500–$13,000

• Solar panels cost: $18,000–$35,000

Interior Home Finishing

Interior home finishes refer to all the natural and synthetic materials used to cover the interior of a building's frame, and they also add the special touch that'll make your new house a home sweet home. On average, interior finishing costs $50,000 to $100,000 but can run much higher. It's one of the more expensive components, and there are endless luxury options available. Think custom countertops and a crystal chandelier over your breakfast nook. How much you'll pay depends on your budget and personal style. 

• Custom cabinet price: $2,000–$30,000

• Countertop installation cost: $2,000–$4,350

• Interior door installation cost: $5,000–$20,000

• Drywall installation price: $5,000–$30,000

• Flooring installation price: $10,000–$35,000

• Interior painting price: $4,000–$11,000

• Appliance price: $3,000–$15,000

• Lighting fixture cost: $2,000–$12,000

• Fireplace installation fee: $1,000–$10,000

Consider anything you can DIY to reduce costs. For example, if you have the time and skill to do the painting, you can save up to $10,000. These savings might let you splurge on granite countertops, solid wood kitchen cabinets, or an upscale appliance or two.

Exterior Home Finishing

Just as important as building a new home that fits your needs and personal aesthetic, the exterior finish also contributes to your property's overall look and feel. The exterior finish is the material or coating used to decorate and protect the exterior wall surfaces. This can include masonry veneer, stucco, siding, and shingles.

Exterior finishing costs about $40,000 to $60,000 and includes exterior walls, roofing, windows, and doors. The number of building openings and types of exterior finishes will affect this price:

• Roofing installation cost: $5,700–$12,000

• Window installation cost: $3,000–$9,600

• Painting a home exterior cost: $1,800–$4,400

Additional Cost Factors 

Here are some additional items to consider if you’re interested in adding a pool, backyard, or even a basement.

Outdoor Space

When you’re thinking about building a house, don't forget about planning out the cost of outdoor living space. The national average is about $7,670 for an outdoor living space, with a typical range between $4,150 and $11,190.

Pools are a great feature that adds value to the property. In-ground pools cost anywhere from $36,000 for a more basic model to $100,000 for a luxury custom design. Outdoor kitchens will cost between $5,530 and $22,150, and large decks cost $4,080 to $11,300. While these features can increase the value and enjoyment of your home, they can also impact its construction and upkeep costs.

Basement

You'll spend an average of $110 to $300 per square foot on building a home with a basement. Finishing a basement costs an additional $7 to $23 per square foot, while the lower end of the budget will get you a basic finish with inexpensive materials and some lighting and electrical outlets. You can turn the basement into a real living space at the higher end, with multiple rooms, including a bathroom. 

Budgeting for the Cost of Building a House 

When calculating the cost of building a house, the best advice is to budget the dollar amount each project requires as well as the necessary space and time to build. If you're unsure how to calculate the project cost—including architect rates, permit costs, material prices in the current market, and the finishes—allot a buffer of around 20% on top of your budget for emergency circumstances. 

"Smaller costs—such as those for surveys, driveway paving, and soil testing—must be considered upfront because they add up quickly and can blow your budget," says Cati O'Keefe, Expert Home Building & Sustainability Contributor.