If you’ve ever found yourself tirelessly scouring the internet and visiting countless properties, only to discover deal breakers in each and every one, chances are you’ve contemplated abandoning the idea of buying a house altogether. Instead, you might have considered having your own house plan and building your home from it.

The prospect of constructing your own house offers numerous advantages, with the primary one being the ability to tailor every aspect to your exact desires. This allows you to bring to life a dream home that fulfills every item on your checklist – granted that your budget permits it.

How much it costs to construct a house

So you might be wondering if it’s more affordable to build a home instead of buying one. Now, when it comes to the cost of constructing a home in 2023, there are some very interesting statistics that you could take into consideration.

The average price is around $298K, based on reports (see examples of modern house plans under $300K to build). While this may seem like a high amount, it’s actually lower than the median home sales price around mid 2023, which is $437K, according to government data. Most people typically spend as high as $484K, or as low as $112K when constructing their houses. Take note that you’ll also need to purchase and prepare the land where your dream home will be upon.

However, the data above should only be considered as ballpark figures. The total cost or expenses from constructing a custom house can differ significantly based on several factors such as the construction materials used, your design choices, your location within the country, and labor expenses.

Typical cost to build

Typical cost to build based on the number of bedrooms

Breaking down the typical costs to build a home

The construction of a house may be divided into numerous phases, each with its own set of expenditures. It is vital to remember that these costs are susceptible to alter depending on factors such as land, material, and labor demand. So, let’s get started and look at the various stages of home construction and their associated costs.

Purchasing and Preparing the Land

When embarking on the construction of a house, the first step is to secure a suitable piece of land. This entails not only acquiring the land but also arranging for its clearance, which may involve tasks such as tree removal and leveling.

The price of purchasing an undeveloped plot can vary significantly based on several factors, including its size and location. The average cost of land acquisition varies across different states and regions, but as a rough estimate, you can anticipate spending between $1,300 and $5,100 on land preparation before commencing construction.

Drawing house plans and securing permits

After acquiring your plot of land, the initial step in the construction process involves engaging a general contractor and subcontractors who will commence preparations for building your dream home. This phase encompasses obtaining all the essential permits and enlisting the services of an architect to draft the different types of house plans for your residence.

The expenses associated with house plans can range from $500 to $20,000 on average. However, the exact cost will depend on the complexity of your desired design and any specific building permits or preliminary inspections that may be required. It is important to note that building permit regulations can vary across different locations but typically incur costs ranging from $1,200 to $2,000.

Preparing and building the foundation

Once all the necessary preparations have been completed, it’s finally time to get started on the construction. A team of skilled workers will arrive to dig out a designated area where your home’s foundation will be laid.

Next, they will carefully pour the concrete based on the specific type of foundation you have chosen: whether it’s a slab, crawl space, or basement. Typically, a concrete slab foundation tends to be the most affordable option, followed by the slightly more expensive crawl space and finally the basement foundation which is usually the most costly.

Ultimately, your decision on which type of foundation to go with will depend on both your budget and personal preferences. It’s important to thoroughly research each option as having issues with the foundation can significantly impact a property’s resale value.

The cost for preparing and constructing your foundation typically averages around $9,000.

Home framing

When it comes to the next step, framing, imagine it as constructing the foundation of your house. You’ll start by framing the floors and then covering them with plywood. The walls will be framed, raised, and sheathed with plywood or oriented strand board. Finally, you’ll build and place trusses on top of the wall frames to frame the roof.

Now in terms of cost, this process’ cost typically ranges from as low as $20,000 to as high as $50,000 depending on the size and floor plan of your home. But on average, it comes out to be around $35,000.

Installation of external elements

It is now the moment to proceed with the installation of the essential systems that keep your home running smoothly, including water, air, and electricity. During this stage, the plumbing and HVAC systems will be put in place, while an electrician will handle the wiring and connect your home to the power grid.

Please note that no fixtures or decorative elements will be added at this point. The focus is solely on setting up all the necessary infrastructure such as pipes and ducts. The average cost for installing these major systems is approximately $52,500.

Addition of interior finishes

After completing the foundational work, the focus shifts to the interior finishes, which encompass various elements such as insulation, drywall, flooring, and interior doors. These components play a vital role in transforming the newly constructed structure into a comfortable and habitable home. Additionally, cabinets and countertops will be skillfully installed, walls will receive a fresh coat of paint, and appliances will be seamlessly connected.

It’s important to note that this phase of the home building process can be quite costly. The specific expenses are highly influenced by individual preferences. Generally speaking, interior finishes may amount to approximately $75,000. However, it’s essential to acknowledge that this figure has the potential to significantly surpass expectations depending on one’s choices. Once this meticulous step reaches completion, your dream home will come remarkably close to its final form.

Outdoor space additions

When it comes to finishing your house, you may want to consider extra components such as outdoor spaces and other features. Creating an outdoor living space normally costs between $4,150 and $11,190, with the national average being around $7,670.

The average cost of a bigger outdoor deck is roughly $7,690. However, depending on the materials and labor necessary in the construction process, a smaller deck may be less expensive.

It’s important to note that adding distinctive elements to your outside space might drastically raise the entire cost. In-ground pools, for example, can cost anywhere from $36,000 to $100,000, while outdoor kitchens typically cost approximately $13,840.

Cost based on size

Determining the cost of a home is heavily influenced by its size, particularly when calculating the price per square foot. Let’s delve into the details of what you can anticipate paying for a newly built home based on different popular house sizes. It’s worth noting that the median size of a new single-family home in 2022 stood at 2,383 square feet.

Factors that affect the expenses of building a house

Please note that the costs mentioned here are just rough estimates based on national averages and are subject to change depending on various factors. It is advisable to conduct research on the average prices in your specific area and obtain quotes from local contractors for a more accurate understanding of construction costs.

Several factors can impact your overall expenses, including current trends in real estate, availability of materials and labor in your locality, as well as the type and quality of materials you opt for.

The total cost will also be influenced by the type of home you wish to build. A basic, modest-sized home can be relatively affordable to construct. On the other hand, a luxurious, multi-story dwelling with intricate architectural details will naturally come at a higher price point.

When should you build a house?

Are you torn between the decision of buying an already built home or embarking on the journey of constructing your own? There are numerous factors that should be taken into account when making this choice.

When it comes to convenience and speed, purchasing an existing home from the market is generally a simpler and quicker process compared to building one from scratch. Constructing a house can often take several months, whereas buying a home can be finalized within a span of 1 to 2 months. Furthermore, building a home typically comes with its fair share of stress and requires numerous decisions to be made. If you wish to spare yourself from months of headaches, opting for buying a home may prove to be the easier route. Additionally, securing a mortgage may also be more straightforward since there is no need to navigate through the complexities of finding construction loans.

On the contrary, constructing your own home provides you with the opportunity to have everything precisely as you desire, whereas purchasing a pre-built property often entails making compromises. Moreover, as long as your self-built abode is constructed well, you won’t have immediate concerns about expensive repairs that might arise with an older house in need of roof replacement or HVAC system installation.

A newly constructed dwelling ensures that all components are brand new and more likely to last for many years compared to older components found in existing homes.

How to fund the construction of your own house

Now when it comes to actually paying for a new house, there is a big difference between builders and buyers. Buyers can avail of a mortgage loan to fund the purchase of an already built house, and there are a lot of options out there. Builders, on the other hand unfortunately, don’t have those same options accessible to them.

For builders who lack the necessary funds, their best bet is to get a home construction loan. These type of loans are designed to provide short-term financing for the construction of a new home. Once the construction is finished, the loan can be converted into a traditional mortgage.

Alternatively, builders can opt for a construction-only loan which covers the costs of construction. After completing the project, they can then apply for a traditional mortgage to pay off the initial construction loan.

FAQs (Frequently Asked Questions)

Let’s dive into some commonly asked questions about the expenses involved in constructing a house.

Should I buy or build my house?

When it comes to the choice between constructing a house or purchasing one, the decision ultimately rests on your financial considerations. Building a home allows you to bring your dream house to life, but it can be a costly and time-consuming endeavor. To determine the most suitable option for your unique circumstances, it is advisable to estimate the expenses associated with both building and buying a house.

Which part of the house is the most expensive to build?

Building a house incurs various costs, and among them, the interior finishes tend to be on the pricier side. These finishes encompass a wide range of elements such as fireplaces, countertops, flooring, lighting, and many other aspects.

How will I be able afford to build my dream home?

When embarking on the construction of a house, it is common to require a construction loan in order to initiate the project. Subsequently, securing financing for the actual home typically involves obtaining a mortgage. Construction loans are of short-term nature and can later transition into a conventional home loan.

How much will I spend to construct a tiny house?

Prices for houses under 2,000 square feet range between $80,000 and $300,000. In 2022, the average size of a new single-family home will be 2,383 square feet. The expense of building a house rises directly in proportion to its size.

The cost of turning a house plan into an actual house

When it comes to constructing a house, the average cost in 2023 is approximately $298,136. However, homeowners typically spend anywhere between $111,980 and $484,293 on building their homes. It’s important to note that this cost can vary due to several factors.

But cost is not the only consideration. There are other aspects to think about as well. For example, you need to weigh the level of customization that comes with building a new home against the convenience of purchasing an existing one. While securing financing for an existing home may seem daunting initially, it is generally simpler compared to transforming a house plan into an actual livable home.