In most cases, it can usually be less expensive to build a house than buy it. But how much does
it cost to build a house?
The average cost for building a house in the US in 2022 is $283,900, while the average price of buying a house is $496,900. That is more than 1.5 times higher!
In addition to the budget, there are many benefits to building a new house. From a design that is
customized to your vision, to appliances and furniture that are completely brand new.
How much does it cost to build a house?
We have mentioned that Home Advisor states the house costs $284,057 to build in 2022, which
is comparably lower than the average sales price for an existing house. With that said, there are
still some other factors to consider that will affect your ultimate cost, including size, location,
material, and design.
This is why the typical range can vary anywhere between $119,000 and $449,000, so building a
the house will only be cheaper than buying depending on your situation.
What affects the cost of building a house?
It is challenging to pinpoint exactly the cost of each factor, as this changes throughout the
country and during the time of the year. This includes current property trends, neighborhood, the
land itself, material availability, labor availability, as well as the quality and type of materials you
want.
Of course, high-end homes with multiple stories and dramatic architectural features will
definitely cost you much more than a small and simple suburban home.
The average cost to build a house per sq ft
In terms of the cost per square foot, the range is usually $100 to $200 for a standard house. But
this cost can shoot upwards of $500 or more for more lavish accommodations with integrated
smart tech and energy-efficient features.
Cost based on location
Location can be a huge determinant when building a house, with New York marking a record
high of $950,000 on the higher end and $800,000 in Connecticut. But you are also able to build
houses of $250,000 in the outskirts of New York or $300,000 in Connecticut.
Meanwhile, some of the cheaper states to build a house include Georgia (as little as $100,000),
Oregon ($175,000), and Tennessee ($185,000).
What is the cost to build a house in California?
For those living in California or wanting to build a new home in The Golden State, the average
cost would be roughly $387,500, while the standard range is $194,500 to $580,500. However, if
you want to go for a more luxurious build in a more central location, it can cost up to $1 million
or more!
California itself is the most populated state and home to 39.51 million people. The sheer amount
of people and increasing demand for houses will naturally increase the price of land and building.
Labor costs of building a house in California
A lot of people contribute to building a single house, which means you have to pay for various labor
services to different contractors.
While the exact cost may differ, you can expect fees such as:
- Construction manager: 5% to 15% of total construction cost
- House framing: $7 to $20 per sq ft
- Electrician: $50 to $100 per hour
- Plumber: $45 to $200 per hour
- Roofer: $5,000 to $10,000
- Driveway paving: $5 to $10 per sq ft
- HVAC installation: $500 to $2,500
- Landscaping: $3,000 to $15,000
How you can afford to build your own house
A mortgage loan may be useful for those who want to buy an existing home, but what about
building a new one? You can’t use it for building a house as a traditional mortgage may not work
for home building. So, this is where a home construction loan can come into place!
A home construction loan refers to a short-term loan that can help you fund the construction of
your new house. Once the construction phase has been completed, it is possible to convert the loan
into a regular mortgage.
Summary
At the end of the day, both purchasing an existing home and building a new house can be a
huge milestone for you. The costs are not cheap and may require some saving up and
investment plans.
One tip we can give future homeowners is to use a fixed contrast with your builder, so that
increasing material prices will not ramp up your costs.
Don’t forget to consider aspects such as the location and design too. After all, if this is going to
be your forever home, you will want to build an oasis that makes you feel relaxed and happy.
Investing in better quality materials, in the beginning, might also be worth it, as this means they
will be more durable in the long term.
