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Building A House: A Breakdown Of How Much It Costs

January 16, 2024 8-minute read

Author: Miranda Crace


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If you’ve spent hours browsing homes online and in-person only to find dealbreakers with every single one, you may have considered giving up on buying a house altogether and opting instead to build your own place from the bottom up.

Building your own house can come with a lot of benefits, the main one being that you have the opportunity to get exactly what you want and create a dream home that checks off every item on your list – provided you can afford it.

How Much Does It Cost To Build A House?

According to HomeAdvisor, the average cost to build a house in 2023 is $298,136 That may sound like a lot, but it’s actually less than the median home sales price, which was $436,700 in May 2023, according to the U.S Census Bureau and the U.S. Department of Housing and Urban Development’s data.

So is it cheaper to build a house rather than buy one? Not necessarily. The total cost of building a custom home can also vary quite a bit depending on the choices you make, the building materials you use, labor costs and even what region of the country you’re in. Though $298,136 is the average, most homeowners spend $111,980 – $484,293 to build their homes. Keep in mind, you also need to buy and prep the land the home is on.

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Average Cost To Build

National Average


Minimum (800 square feet)


Maximum (5,000 square feet)


Average Range

$111,980 – $484,293

Source: HomeAdvisor

Average Cost To Build Per Number Of Bedrooms

Bedroom Count

Average Cost







Source: HomeAdvisor

A Breakdown Of The Average Cost To Build A House

Let’s take a look at the different steps that make up the home building process and break down how much each step typically costs. Keep in mind these costs can fluctuate with demand for land, materials and labor.

Buying And Prepping Land

Before you can build a house, you need to find land to build it on. Not only will you have to purchase a plot of land, but you’ll have to have it cleared. This can include tree removal and having the land leveled.

The cost of purchasing an empty lot will vary depending on a variety of different factors, including the size of the lot and its location. The average cost purchasing land varies widely depending on state and location, but nationwide you can also expect to spend $1,300 – $5,100 on land preparation before breaking ground on construction.

Drawing Up Plans And Getting Permits

Once you’ve got your land, your general contractor and subcontractors will start preparing to build the house. This stage includes purchasing all the necessary permits and having an architect draw up floor plans for the home.

On average, house plans can cost anywhere from $500 – $20,000 but the exact cost will vary depending on how simple or complex your house is going to be and what types of building permits and preliminary inspections you may need. Building permit requirements will differ between locations, but on average cost between $1,200 and $2,000.

Prepping And Building The Foundation

After all the prep work is taken care of, it’s finally time to break ground. A crew will come and begin digging out a space for your home’s foundation.

Then, they’ll pour the concrete according to which type of foundation you’ll have: slab, crawl space or basement. Typically, a concrete slab foundation is the cheapest, followed by the slightly more expensive crawl space and the most expensive basement foundation.

Which foundation you choose will depend on your budget and preferences. Each type has its pros and cons, so be sure to do your research. Most people won't be interested in buying a house with foundation issues.

Prepping and building your foundation will, on average, cost around $9,000.

Framing The Home

Next up is framing. Think of this step as building the skeleton of your home. Floors will be framed and then covered with plywood. Walls will be framed, raised and then sheathed with plywood or oriented strand board. Then, the trusses that will frame the roof are built and placed on top of the wall frames.

All in all, this process will cost $20,000 – $50,000, depending on size and floor plan, averaging around $35,000.

Installing External Elements

Once the skeleton is built, all the necessary external elements of the walls, roofs and openings will be installed. This means exterior finishes like the siding will be put up on the walls, then windows and doors will be put in, after which the roof will be sheathed – covered in roofing felt and nailed-on shingles. In total, this can cost around $50,000.

Installing Plumbing And Electrical

Now it’s time to install all the major systems that make your home hum with water, air and electricity. At this stage, plumbing and HVAC systems will be installed, and an electrician will wire your home and get you connected to the power grid.

No fixtures will be added at this time; this step is about getting all the behind-the-scenes stuff like pipes and ducts set up. Major system installation costs average around $52,500.

Adding Interior Finishes

Next are the interior finishes. This includes adding insulation, drywall, flooring, interior doors and all the basic components that will turn the newly constructed structure into a livable home. Cabinets and countertops will be installed, walls will be painted and appliances will be hooked up.

This can easily be one of the most expensive parts of the home building process, and the exact cost will depend on your personal preferences. Interior finishes could cost around $75,000, though that number could easily be much higher, depending on your choices. Once this step is finished, your home’s construction will be all but complete.

Outdoor Space

The final step includes any other additions you want made to your property, including any outdoor spaces or other features. An outdoor living space typically ranges from $4,150 – $11,190 with the national average around $7,670.

On average, a large outdoor deck will cost around $7,690. If you’re looking for a smaller deck, this cost could decrease depending on the materials and labor involved in the building process.

Of course, special features can raise the cost of your outdoor space considerably. In-ground pools, for example, can cost anywhere from $36,000 to $100,000, while outdoor kitchens can cost around $13,840.

Cost By Size

One of the biggest factors determining how much a home will cost is its size, specifically calculating the price per square foot. Here’s a breakdown of what you can expect to pay for a newly constructed home by popular house sizes. For reference, the median size of a new, single-family home in 2022 was 2,383 square feet.


Average Cost Range

800 sq. ft.

$80,000 – $160,000

1,000 sq. ft.

$100,000 – $200,000

1,200 sq. ft.

$120,000 – $240,000

1,500 sq. ft.

$150,000 – $300,000

2,000 sq. ft.

$200,000 – $400,000

2,500 sq. ft.

$250,000 – $500,000

3,000 sq. ft.

$300,000 – $600,000

Source: HomeAdvisor

Factors Affecting The Cost Of Building A House

It’s important to note that all of these costs are approximations based on national averages and are subject to change based on a variety of conditions. You’ll need to do some research into the average prices in your area and get estimates from potential local contractors for the most accurate construction costs.

Your overall cost can be affected by all sorts of factors, including current real estate trends, the availability of materials and labor in your area and the types and qualities of the materials you choose.

The total price you pay will also be determined by the type of home you’re building. A very simple, small home can be relatively affordable to build. A more high-end, luxury home with multiple stories and architectural flourishes will, naturally, be much more expensive.

When To Consider Building A House

Weighing whether you should buy an existing home or take the plunge and build your own? There are many important factors to consider.

Compared to building a house, buying an existing one off the market is typically a much simpler and faster process. New homes can take several months to build, while the home buying process can be completed in as little as 1 – 2 months. Additionally, building a home usually comes with plenty of stress and lots of decision-making. If you’re looking to spare yourself months of headaches, buying a home might be the easier option. It can also be easier to get a mortgage because you don’t have to deal with finding a construction loan.

On the other hand, building your own home gives you the opportunity to get everything you want, while the home buying process requires you to make a lot of compromises. Plus, as long as your home is well-built, you won’t have to worry about dealing with costly repairs right away, as you might with an older house needing a roof replacement or a new HVAC system.

A newly built home means you have all-new components, which are more likely to last for years to come than an existing home’s older components.

How To Afford Building Your Own Home

While hopeful home buyers can apply for a mortgage loan to finance the purchase of an existing home, home builders don’t typically have that same option.

If you don’t have the cash to fund this project, what you’ll need is a home construction loan. These are short-term loans that are used to fund the building of a new home. You can get a home construction loan that converts to a traditional mortgage loan once the construction has been completed.

You can also get a construction-only loan that covers the costs of construction and then, once the project is completed, apply for a traditional mortgage to pay off the construction loan.

Rocket Mortgage® doesn’t offer construction loans at this time.

FAQs About The Costs Of Building A House

Let’s answer some frequently asked questions regarding how much it costs to build a house.

Should I build a house or buy a house?

The decision to build a home instead of buying one is up to you and what you’re looking to spend financially. While building a home is the best way to create your dream home, it could get expensive and take a long time. Estimate the costs for building versus buying a house to figure out which route works best for your specific situation.

What is the most expensive part of building a house?

The costs involved in building a house can vary depending on several factors, but one of the more expensive costs is usually the interior finishes. This can be anything from fireplaces, countertops, flooring, lighting and much more.

How can I afford to build a house?

Since you’re starting from the ground up when building a house, you might need a construction loan to get started then eventually you’ll need a mortgage to secure financing for the actual home. Construction loans are short-term and can turn into a traditional home loan.

How much does it cost to build a small house?

Homes that are under 2,000 square feet could range in cost from $80,000 – $300,000. It’s important to note that the median size of a new, single-family home in 2022 was 2,383 square feet. The larger the home, the more you’ll end up paying to build it.

The Bottom Line: Calculate The Cost Of Building A House

While the average cost to build a house is $298,136 in 2023, most homeowners spend $111,980 – $484,293 to build their homes. Even though you can get a general idea of what you may pay, it’s important to keep in mind that there are numerous factors that will impact the cost to build.

There’s also a lot more to consider than cost. For instance, you’ll want to weigh the customization that comes with building a new home against the convenience of buying something preexisting. Although the process of securing financing for a preexisting home might feel intimidating at first, it’s much simpler than if you’re building a house from the foundation up.

Why not learn about mortgage approval to get a clearer view of the path you’d find ahead of you with a conventional mortgage? You can apply online or give us a call at (833) 326-6018.

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Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years. Miranda is dedicated to advancing financial literacy and empowering individuals to achieve their financial and homeownership goals. She graduated from Wayne State University where she studied PR Writing, Film Production, and Film Editing. Her creative talents shine through her contributions to the popular video series "Home Lore" and "The Red Desk," which were nominated for the prestigious Shorty Awards. In her spare time, Miranda enjoys traveling, actively engages in the entrepreneurial community, and savors a perfectly brewed cup of coffee.