how much does it cost to build a house

How Much Does it Cost to Build a House from Scratch?

The cost of renting a house continues to rise by the day. This irritates many tenants, especially when they are unable to keep up with the price increase.

There is a simple solution to this problem if you are one of those renters. That is the process of constructing your home.

Being a homeowner is one of the best investments you can make. Whether you intend to reside in the house with your family or rent it out, it is one of the most valuable assets you can have if you know how to manage it properly.

This is why we’ve produced this post to help you get started on your building project.

How Much Does it Cost to Build a House from Scratch?

Building a house is not as tough as many people make it out to be. Depending on your budget and other circumstances, you can choose from various housing possibilities.

You can build a self-contained room, a 3-bedroom cottage, a multifamily rental structure, or a duplex, depending on your budget and available resources.

As a result, in order to finish your project on time, you must cut your coat according to the fabric.

How Much to Build a Home vs Buying a Home 

Buying an old house is less expensive than building a new one. This is due to rising material and labor prices over time. However, both solutions have pros and cons. 

Buying a Home

Home prices in the United States climbed by 1.5% year on year in January 2023. The average cost is $383,460.

Building a Home

How much would it cost to construct a house? If the cost of land is excluded, the average is roughly $300,000.

What Does it Cost to Build a House Per Square Foot?

A 2,000-square-foot home may comfortably accommodate an American family of three to four individuals. As seen below, the average construction cost per square foot is roughly $150.

Construction expenditures for a home for a family of four should be around $300,000. 

If you want to create a builder-grade home, the lower cost range will be most important. Depending on the characteristics of the property, customized luxury buildings will cost $500 per square foot or more.

The Factors Behind Your Homebuilding Costs

The cost of constructing a new home varies depending on various factors. Consider the following factors if you’re considering going this path.

Unless otherwise specified, the tables below use data from HomeAdvisor.

Square Footage

The cost of your new home will be heavily influenced by its size. A larger home often costs more to build because more materials are used.

According to the Census Bureau, the median size of a new single-family home in November 2021 was 2,337 square feet.


Several factors influence construction costs. Because of differences in labor, materials, regulations, and permission procedures, an identical house in one state may cost twice as much to build in another.

Furthermore, the cost will be influenced by the home’s location, which will vary in size, shape, soil, and temperature.

Slopes or bad soil, for example, will often necessitate additional engineering and foundation work.

Here’s how much it can cost to build a house in various U.S. cities. The price shown is the high-end average cost of actual home-building projects reported by HomeAdvisor users, although the ultimate cost of your home may vary significantly:


Labor expenditures make up roughly 40% of the home-building budget. These labor expenses vary by geography, house size and complexity, and the purchasing power of your general contractor. 

Larger residences with more personalization cost more than smaller homes with prefabricated elements.


The materials required to construct your home may consume up to half of your overall budget. However, the cost is largely impacted by the quality of the material used. 

When planning, you can consult the builder to select materials within your budget. They will provide you with an estimate depending on your designs.

Special features

If you want to create a premium or custom home, the price per square foot ranges from $200 to $500.

However, you can improve your budget by adding one or two exceptional features, such as a swimming pool, heated floors, larger ceilings, or a basement.

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How to Calculate the Cost of Building a House

Price estimates from homebuilders are based on expert knowledge and experience, and they consider every component of a home’s structure, systems, and finishes. 

However, using their pricing as a starting point, you can generate a reasonable figure for the cost of building your own home.

To figure out how much it will cost to build a house, follow these steps:

  • Choose a size, style, and location. Have an idea of how big you want your house to be, what kind of finishing you want, and where you want to build it.
  • Look through the websites of area builders. Check out their websites and obtain quotations to get an idea of what builders are asking for homes similar to yours. Match elements such as garages, the number of roof angles, the number of levels, the type of foundation, and the construction materials.
  • Perform the calculations. Take the average sizes and prices of the homes you’re interested in and divide the average price by the average square footage. When looking at building plans, keep that price-per-square-foot ratio in mind.
  • Look into the finishes and features. Examine the finishes and features of comparable homes, and make alterations based on your tastes. Differences in features such as builder-grade carpet against hardwood flooring and vinyl siding versus fiber cement siding can cost tens of thousands of dollars in identical homes.
  • Determine the cost of obtaining land. If you do not own a building lot, you must purchase land to construct your home. You can look for listings on real estate websites such as Redfin or deal with a local real estate agent.
  • Take into account the cost of preparing the lot. Unless it’s clear and has access to utilities, you’ll need to make phone calls to figure out how much it’ll cost to finish that work.
  • Don’t overlook permissions and inspections. Prices for builders frequently include essential permits and inspections. If the comparable homes you looked at didn’t feature those, call your local zoning authority to find out what’s needed and how much it will cost.
  • Calculate the cost of your plans. To produce a home blueprint or house plan, you’ll need to engage a draftsperson. The cost of a custom home design varies greatly depending on the complexity of the design and whether you choose off-the-shelf prints or a bespoke home design.
  • Allow for potential overruns. Allow for unanticipated expenses and cost overruns in your budget.

When to Consider Building a House

While building a home can be costly, for some purchasers, the option to customize the space makes the expense worthwhile. If you’re considering building a house, consider the following benefits and cons:


  • You can personalize your own home.
  • New homes typically require less maintenance.
  • You have the option of choosing where you want to build your home.


  • Obtaining financing for a building project might be difficult.
  • A new home may be more expensive than a previously purchased property.
  • Making many home construction decisions throughout the project may be time-consuming.


Rather than building the house you desire today, consider where you will need to live in the future.

If you intend to stay in your current house indefinitely, you can save money on future renovation expenditures by preparing your home for accessibility now. 

Furthermore, this ensures that elderly or disabled relatives or friends can easily visit and tour your property.

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