Cost To Build A House

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    More and more future homeowners are considering the idea of building a house instead of buying a home that’s listed on the market, and for good reason. The national average cost to build single-family homes is a little over $275,000. However, the average price of the same-sized home on the housing market is almost $500,000. If you’re considering building a house, this blog is for you! We’ll go over everything that you need to know to help you determine the cost of building a house, and how to save money when building a house.

    Factors That Contribute To The Cost Of Building A House

    cost to build a house

    The difference in the numbers for building a home compared to buying a home that is already built is enough to make your jaw drop, but there are quite a few things to keep in mind regarding the price of building a home. Your home could cost significantly more, or less, than the estimated $275,000.

    Vendors Hired

    One of the biggest costs will be the contractors for building a house. Approximately 30-40% of the total cost will go to vendors, such as a roofing contractor, electrician, plumber, etc. The cost of these contractors adds up to a sizable chunk of your budget.


    Appliances are another expense that contributes to the high cost of building a home. Brand new appliances can cost thousands of dollars. You’ll need a washer, dryer, stove, refrigerator, dishwasher, and any other appliances that you want in your new home, such as a deep freezer.


    Customizations will add a pretty penny to the price of your home. This includes customized cabinetry, a customized floor plan, a customized vanity, etc. In general, customized items cost more than pre-fabricated items.


    Location plays a large role in how much it will cost to build a home. If the area that the home is being built in has a high cost of living, the house will be more expensive. Likewise, building a home in areas that have a lower cost of living will be cheaper.


    Larger houses cost more than smaller homes. You can build a large house for a little over $100 per square foot in Ohio. However, you can also buy a tiny house that simply needs the interior done for roughly $10,000.

    Current Economy

    The state of the economy has a drastic impact on the cost to build a home. During periods of inflation, the cost of labor will go up. If the price of materials, such as concrete and lumber prices, the cost of everything from the foundation cost to the cost of the home itself will increase.

    Likewise, during periods when materials are cheaper, the typical cost of building a home will decrease. You can save thousands of dollars by choosing the right time to build a home.

    Average Prices To Consider

    how to save money when buying a house

    Every little detail of your home will contribute to the price of the home. These are some of the larger and most common costs you’ll come across when building your own home:

    • Framing: up to $50,000
    • Foundation: $8-10,000
    • Land: depends on location and size
    • Roof: $15,000
    • Appliances: $4,000- $17,000
    • Permits: up to $100,000

    These are the prices that most homeowners will see when they are breaking down the average construction cost. However, there is plenty of room to save money. For example, the cost of materials contributes greatly to the total cost of a roof. A tin roof is more expensive than a roof with shingles.

    How To Save Money When Building A House

    Building a house can be expensive, especially when you consider how many square feet you want your home to be. However, there are quite a few ways that you can cut down on the average cost of building your home.

    Invest In Developed Land

    While you might not be willing to cut down on the square feet you want, there are a few other areas where you can make compromises to help cut costs. One area is taking a good look at the plot of land you want to purchase.

    Undeveloped land usually does not have electricity, pipes, etc. It can sound like a dream come true to develop the land and enjoy your dream home in the perfect location, but you can cut back on costs, including labor costs, by purchasing a plot of land that is already developed.

    If the plot of land already has a house on it, you can tear down the house and build a new one. This can be cheaper than purchasing a home for sale on the market. Simply find a home near you that has a low estimated value and needs to be torn down. Make sure that you know what a home is worth to determine whether you will save money by taking this route.

    Hire A Draft Developer Instead Of An Architect

    Certain vendors will cost significantly more than others. For example, an architect that is drawing up your house plan will charge more than a draft developer. If you don’t intend on building a custom home with all the frills, consider not hiring an architect.

    Cut Costs In Small Areas

    Although there are plenty of large areas where you can cut costs, you can also cut costs in small areas. Consider trimming a few square feet off the size of the house. Get solar panels, which can add around $20,000 to the cost of the house, installed later. Opt for cheaper options regarding things like landscaping. Settle for a gravel driveway if you don’t have to have asphalt. All of those small changes add up to big savings.

    Shop Around

    When you’re trying to cut costs on building a house, it’s important to shop around. A lot of your budget will go to things like the building cost, the cost of land, etc. However, you can shop around to find a plot of land that is affordable that you can also fit a 2,000-square foot home on. Shop around for different materials for the floor, cabinets, affordable appliances, and everything else in the home.

    When shopping around, make sure that you don’t compromise quality to save money. It can be nice to cut additional costs off the overall price, but you’ll wind up paying more in the long run if you sacrifice quality. Other areas where you can cut costs by shopping around include:

    • Exterior finishes
    • Building materials

    Benefits Of Building A House

    building a house

    There are several benefits to building your own home. Not only do you get to customize every inch of your home to make sure that it’s perfect for you and your family, but you get to enjoy a cheaper price and a brand new home.

    Building A Home Is Cheaper Than Buying One

    It might take longer for a home to be built, but the additional wait time is well worth it when you consider that you’ll be saving hundreds of thousands of dollars. If you take the time to consider every area where you can save money when building a house, you’ll save even more money by building a house.


    One of the best things about building a home instead of buying a home that is already made is that you get to customize every inch of the home. Bedrooms will be the perfect size. The kitchen cabinets will be the perfect color. Even the windows will be the ideal size.

    It Will All Be Brand New

    One of the huge benefits of building a home instead of buying one is that it will be brand new. Your home will be move-in ready. You won’t have to worry that there are underlying issues with the house, or discover that it has several problems after you move in as is the case with many iBuyers or rent-to-own programs. 

    Tips For Building A House

    Building a house for the first time requires a bit of a learning curve. You have to learn how to get a building permit and understand that getting construction loans to build the home and purchasing the land are two separate processes. These tips will help make the building process seamless.

    Get Approved For A Loan To Determine What You Can Afford

    If you’re working with a lender, what you can afford will depend on how high of a loan you qualify for instead of how much cash you have. Work with a lender before shopping for a plot of land to see what your budget will be. Then, plan the cost of your house around how much money will be available.

    Work With The Right Real Estate Agent

    Working with the right real estate agent is crucial to enjoying the process of building a home. A real estate agent will be able to:

    • Discuss construction costs with you
    • Understand construction laws to build a house
    • Walk you through the entire construction project
    • Help you determine a realistic construction budget
    • Refer you to reliable, and affordable, vendors
    • Help you figure out a cost breakdown, including cost estimates for things like materials, land cost, and the cost of construction

    Understand The Timeline And Expenses

    It can be exciting thinking about moving into a new home, but it’s important to be realistic. Work with your real estate agent and construction crew to make sure that you have an approximate timeline to build a house. 

    Understanding the total cost of the home, and the cost breakdown is important for future homeowners. The last thing that you want is to be shocked when you realize the exact cost that it takes to build a house.

    Be Prepared For Unexpected Expenses

    Sometimes, projects tend to go over budget. Because of that, it’s always important to set aside at least a few thousand dollars to accommodate things like last minute changes.

    Plan Your Home Before Hiring Contractors

    The entire home should be planned before hiring contractors, or even buying a plot of land. If you would like a custom home, it’s important to plan everything, from the kitchen cabinets to the type of bathtub. This will guarantee that you don’t feel overwhelmed or make rushed decisions while your home is being built.

    Understand How Permits Work

    Permits can come with a hefty price tag, so it’s important to learn about them as soon as you plan on building your own home.

    Ask Your Realtor

    Permit costs tend to vary depending on location, unfortunately. If you are working with an experienced real estate agent, ask them for information regarding permits. They will be able to point you in the right direction.

    Keep in mind that if the owner of the house is the one that gets all of the building permits, such as the permit for the roofing job, the owner is responsible for zoning, keeping things up to code, and they are liable for anything that happens. That’s why most homeowners would prefer it if the company doing the job gets a permit for the job.

    Often, The Cost Is Included In Construction Costs

    Building permits can add up quickly. There is a building permit for building the house. A separate permit may be required for roofing, and a plumbing permit may be necessary. Other permits will also be required.

    Most companies include the cost of permits in their estimate for the job. However, it’s always a good idea to double check to make sure that you won’t have to pay more than the estimate due to the cost of permits.

    For more information, learn how to build a house! 


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    James Vasquez

    James is the owner of Cyber Homes, a leading cash home buying company in the U.S. He primary buys and resells single family residential homes. James has purchased, fixed/renovated, and flipped over 100 houses in the 10 years of his real estate career. Helping homeowners out of difficult situations while providing for his family, is a gift from God.

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