If you want to know the average cost to build a house, you’ve come to the right place. Of course, there is a huge range in house prices, both for buying and building houses, in the United States. But in every range, there is an average.
Let me start off by saying that the average, and most common, are not the same. The average is every house price added together and divided by how many there are. However, the most common is the price that occurs most often.
Today, we’re talking about the average cost, which is the middle number. The in-between for what people of the upper classes and lower classes might pay. Now that we’ve cleared that up, let’s begin.
Average Cost To Build A House
The average cost to build a house 2,800 sqft home was $428,000 in 2017. But what does this mean for you? Just one number isn’t exactly useful. What if you want a larger home or a smaller home? Where can you cut back?
All of these questions will be answered whenever we breakdown this number and what it means. Let’s work with a 2,800 sq ft home, which is larger than most, but quite a common house size in America.
The average house size depends on a lot of different factors. The state you live in means a lot. The average house size across all of the states is between 1500 and 2500-sqft. But the price you pay varies even greater.
In Massachusetts, you’ll pay almost $300/sqft. But in Arkansas, you will pay around $100/sqft. This is statewide average, because as we’ll see later, city matters even more than state!
Construction Cost – $237,760 – 55.6%
This is by far the largest sum that you’ll pay. But that’s because it’s what matters most. This is your home and it included the cost of every piece of your home, including plumbing, electrical, and even landscaping.
Site Work – $15,903
This includes permits, fees, and inspections that are illegal to go without. This is legal work that needs to be done before you can begin construction. It is roughly 6.7% of the construction cost and needs to be done before anything else.
Foundations – $25,671
This is work that needs to be done before you can start building. This work includes creating the foundation of the house. It starts with excavation and ends with laying the foundation for your home to be built on. It makes up just over 10% of the construction cost.
Framing – $41,123
Framing is very important. This includes the framing of the room, each wall, and making sure there is a level frame to work with. Trusses and sheathes are even included. This is about 17% of the construction cost.
Exterior – $33,066
Exterior finishes can add up, depending on the doors and windows you choose. It also includes your roofing and siding. The price largely depends on the quality of the items you choose. But in general, it will be about 14% of the total construction cost.
Utility – $32,746
Plumbing, electrical, heating, and cooling. These are all necessities for any home with people living in it. That’s what you’ll pay for an average utility job. It will also take about 14% of your initial construction budget.
Interior Finishes – $67,939
Interior walls, painting, appliances, flooring, cabinets, and more. Everything that goes inside your home that isn’t furniture will be in this budget. This is a huge part of your construction cost at almost 30%.
Outdoor – $16,591
This includes driveway paving, landscaping, and everything you need to make your lot look like a yard. It usually amounts to about 7% of the construction cost, varying depending on how much work you want to be done.
Unexpected Costs – $4,722
If something goes wrong, this is where the money comes from. You can always expect there to be an unexpected cost, as ironic as that sounds. It can be about 2% for these costs.
Lot Cost – $91,996 – 21.5%
The low cost is the amount of money you spend to buy the land or lot to build your house on. If you already have the land, you can consider that part done, giving you a 20% discount, as that is about how much is spent on a lot.
Financing Cost – $7,637
This is about how much you’ll spend on getting a loan or financing. It may seem silly, but in order to get money, you need to pay money. This may or may not include any interest you pay on paying your loan off over time.
General Expenses – $21,835
General expenses and overhead costs are never easy to predict. For a business, overhead costs can include labor. But when building a house, overhead costs usually go directly to the contractor’s own overhead costs.
Marketing Cost – $5,314
Yes, you just might have to pay marketing costs to the contractors and other businesses that you hire who have hired a marketing team. They found you or you found them because of marketing, so a chunk of your budget goes to that team.
Profit – $45,902
This is the profit that the contractors make. This is what you pay them above what they are paying for what they need. Contractors are usually paid about 10% of the total cost of your project, which is what this will be.
Commission – $17,448
When you buy a house or when you sell a house, you pay your realtor a commission fee. Both the seller’s realtor and the buyer’s realtor get a cut of this. It usually ends up being somewhere between 4-6% of the property cost.
Average Cost To Build a 1500 SQ FT House
Because a 1500 sqft home is quite normal, though the average home size is over 2000 sq ft, let’s take a look at the average cost to build a 1500 sq ft house. This is fairly easy to figure considering we know what it costs to build a 2,800 sq ft house.
Since the average cost to build a 2800 sqft house is $428,000. We can figure that the cost of building a 1500 sq ft house would be just under $230,000. Since this is a much easier budget to work with, it’s quite a common house size.
If you want to figure the amount of money each project and construction cost would be for a 1500 sq ft home, cut the prices in half. This is the easy way for a rough estimate. For example, utility costs will be closer to $16,000.
Average Cost Per Sq Ft To Build A House
The average cost of building a house is around $150 per sq ft. This number varies depending on the cost of each utility, project, and mishap. But in general, you can expect to pay between $100 and $200 per sq ft for average quality materials.
To figure the cost for your home, use a simple formula. Take the cost of the item that you’re wondering about. Then, divide it by 2800 before multiplying it by the square footage of your new home.
For example, the average interior finish cost for a 2800-sqft home is $67,939. Divide 67,939 by 2800 and get 24. This means that interior finishing is about $24 an sqft. Take 24 and multiply it by your square footage to get a rough estimate for you.
Average Cost To Build A House In Other Countries
An interesting Singaporean decided to calculate the cost of building an apartment in different countries and cities. The countries they chose were relative to them, which is interesting as they don’t include the countries most Americans would. Here’s what they found out.
- USA – $150/sqft
- Vietnam – $55-70/sqft
- Singapore – $120-140/sqft
- Shanghai – $60-65/sqft
- Seoul – $120-150/sqft
- Manila, Philippines – $80-90/sqft
- Macau – $200-240/sqft
- London – $300/sqft
- Kuala Lumpur, Malaysia – $30-40/sqft
- Jakarta, Indonesia – $65-70/sqft
- Hong Kong – $300-350/sqft
- Brunei – $75-100/sqft
- Beijing $55-60/sqft
- Bangkok, Thailand- $55-70/sqft
As you can see, they were accurate on the USA and London, so can assume they were accurate on other places as well. What’s interesting is that they showed us multiple cities in certain countries, like China.
The prices in the different cities varied greatly. This means that the price of building a house, or even an apartment, depends more on the area of the country that you live in. Rather than just the country you live in.
Average Cost To Buy A House
The primary reason that people start considering building a house is that they believe it’s cheaper than buying a house. But is it really? According to recent studies, the cost of buying a house is about $123 per square foot.
Since the cost of building a house is around $150 a square foot, you may think that building a house is more expensive. However, that isn’t always the case. When buying a house, you get what you get. The price is set.
But when you build a house, you can cut costs where necessary. In general, the range for buying a house is huge. You can pay $24/sqft in Detroit or $800/sqft in San Fran. The more desirable the area, the more expensive the house.
If you want a nice house but don’t care about the neighborhood, you can get a considerably nicer house for less just by building instead of buying.