Purchasing a new construction home gives you the opportunity to design your perfect place. But how much does it cost to build a house? That can be a deciding factor in whether or not to do it. Understanding the numbers—and where they all come from—will help you determine if new construction is right for you.
The cost for a builder to build a new home in 2017 was about $237,760 for 2,776 square feet, according to the National Association of Home Builders. However, the total sales price of that home after a buyer pays for the lot, finances the purchase, and everyone makes a profit? $427,892.
Keep in mind that prices could vary depending on location, conditions, and requirements. Here’s a breakdown of where all of those costs come from.
New construction allows you to build the home you want. But there are lots of steps involved, some of which are less exciting than others. Here’s a breakdown of the process and average costs, according to the National Association of Home Builders.
- Site Work: Generally, site work can include building permit fees, impact fees, water, and sewer inspections. It can also include labor or professional work your property needs. On average site work can cost about $15,903.
- Foundation: Foundation costs include excavation, foundation, concrete, retaining walls, and backfill. On average, they’ll be about $25,671.
- Framing: Your home’s frame outlines the size and location of the rooms in your house. Framing will include trusses, sheathing, general metal sheet, and your roof. The average cost for framing is about $41,123.
- Exterior: The exterior costs of your home includes the wall finishes, roofing, windows, and doors. The number of windows and doors of your home will affect the cost. The average exterior cost is about $33,066.
- System installation: Your systems include HVAC, plumbing, and electrical work. The average cost for system installation is about $32,746.
- Interior finishes: The interior finishes of your house make your new construction feel like home. This expense includes paint, drywall, lighting, interior trim, flooring, and plumbing fixtures. The average cost for interior finishes is about $67,939.
- Final touches: You’re almost done. Finishing touches include landscaping, clean-up, and additional outdoor structures. The average cost for finishing touches is $16,591.
In theory, if you built your own house with your own hands on your own property, the costs above would be the whole story. But most people aren’t builders with extra land lying around. The remaining costs that make up the total of $427,892 include:
- Cost of the Lot
- Overhead and General Expenses
- Marketing Costs
- Sales Commission
- Builder Profit
Everything above is an average. Naturally, a custom-built home will have a custom price.
“By nature of custom homes being tailor-made, the cost varies based on factors like the design of the home, the cost of materials, the finishes and features selected by the buyer and the cost of local labor—to name a few,” says John O’Shea, director of pre-construction at Adair Homes
Surprise expenses can come up when buying new construction, too. You should leave room in your budget for environmental issues, weather delays, permitting snafus, and other unforeseen events.
So, how much does it cost to build a house? It depends. Much of it depends on your own decision, but understanding the average costs can help you plan wisely.