The cost to build a house isn’t a simple figure to calculate. However, we explore some nationwide and regional averages and break down the various aspects of home building costs to give you a better picture of what it could cost you to build your dream home. Perhaps you can’t find a home that has the unique floor plan, space, and features you want. Or perhaps you know the neighbourhood you want to live in, but nothing there fits your specifications. Or maybe you have a plot of land with nothing on it. In all these circumstances, you might consider building your dream home instead of buying an existing house. This is an exciting prospect, but there are also many unknowns. Who will design it? Who should you hire to build it? And perhaps most importantly, how much will it cost?
Any time you ask for a broad average like this, there will be variations depending on the data source, which they surveyed, and how many people responded. However, here are some rough, trustworthy estimates. For example, to build a new single-family home in the U.S., the average price tag is…
- $311,455, according to HomeAdvisor’s 2020 estimates
- $296,652, according to the National Association of Home Builders (NAHB) 2020 study
- $281,700 (median contract price), according to the U.S. Census Bureau’s 2019 data
Unfortunately, this average figure alone doesn’t tell you much. Homebuilding costs vary widely depending on several factors, the most significant of which is location. The typical range, according to HomeAdvisor, is between $163,333 and $483,868, which is a fairly large gap. Even figuring costs by square footage, new construction can vary between $100 and $200 a square foot. Customized and luxury homes will cost even more—usually between $200 and $500 per square foot.
Although you’ll want to do your research into the specific location of your choosing, we’ll break down a few of the major costs for you to show you the kinds of items to keep in mind.
How Much Does It Cost To Build a Luxury Home
The first point in discussing the cost to build a luxury/home mansion is that by definition, construction cost and size have nothing to do with defining true luxury. While many of those builders who would claim the title of ‘luxury mansion home builder’ believe that a mansion/luxury home is defined as a home of over 5000-square-feet, made with extravagant materials. The top mansion/luxury home builders disagree, referring to these homes as mansions. They insist that the true definition of a luxury home is a home of architectural significance, uniqueness, superior design, comfort and a great location. A luxury home simply cannot be a tract home that looks similar to its neighbours, no matter how much it costs.
Average Cost To Build A Luxury Home: A Great Location
We do not normally consider the cost of the lot as part of the cost per square footage of the home, but buying a lot in a great location is going to be a significant investment. Choices might include mountaintop, oceanfront, riverside, lakefront or big city penthouse. Certain fabulous neighbourhoods such as those found in Hollywood, Martha’s Vineyard or New York also qualify. Country Club districts in most towns qualify as at least marginally luxurious locations. In some areas, proximity to a major golf course can be considered a luxury lot. If all of this sounds expensive, it is. One alternative would be to purchase a tract of rural acreage with a pond or stream and create your own beautifully landscaped setting.
Average Cost To Build A Mansion Home: How Much For A Lot?
True luxury lots are expensive anywhere in the United States. But, if you want a true luxury home, half a million dollars is a small price to pay for a lot. For example, ocean Front Lots in Florida start at around $400,000. Lakefront lots in the South East start at $125,000, and some exceed $500,000. Lots surrounding Anthem Country Club in Las Vegas range from $400,000 (1/3 of an acre) to over $1,000,000.
Average Cost To Build A Luxury Home: Hiring An Architect
An exceptional architect must design a true luxury home. You will need to hire a successful, innovative, and experienced architect of the calibre required to create a home of true architectural significance. Expect to pay 12 to 20 per cent of the total construction cost in architectural fees.
Average Cost To Build A Luxury Home: Luxury Home Price Per Square Foot
True Luxury home is defined by the level of comfort, uniqueness and beauty it affords, more than the mere cost of materials. Still, genuine marble countertops, elaborate bathrooms, expensive flooring and a stone fireplace seem to be necessary elements of the total package. Luxury homes range in price-per-square-foot from $175 to $800 per square foot. That is quite a range, but it just varies that much, probably due to the different definitions and degrees of luxury involved and the differences in costs from one area to another. Nevertheless, $250 to $300 is an average cost per square foot that seems to typify most areas.
Average Cost To Mansion: How Many Square Foot
Even though a mansion was in part defined by its size for a while, recent trends are to build smaller luxury homes because wasting all that energy on heating and cooling is not politically correct anymore. Homes in excess of 5000 square-foot are now considered overly pretentious. It has been discussed among top architects that size doesn’t matter. It is possible to create a tiny 500 square-foot luxury home. Since a luxury home is defined as comfortable, the question is how large the house should be to provide comfort to your family and guests? Do you need eight bedrooms or five baths? Consider your lifestyle and decide how many bedrooms you need and the size of your dining room. Too much space can be uncomfortable too.
We conclude that to build a true luxury home, the cost of the lot alone would be about a million dollars. Average construction costs would be $300 per square foot, making a 3000 square-foot home cost about $900,000 and a 5000 square-foot home cost $1,500,000. In addition, the architect fees could be up to $300,000. So the average cost to build a luxury home could be approximately 2.2 million to 2.8 million at the average cost-per-square-foot if you include the lot. The average cost to build a luxury home could be twice that amount or more in some areas.
Building vs. Buying
Here’s the big question that looms large in the mind of prospective home builders: Will I save money by building my own home? The answer is, unhelpfully, a resounding “maybe.” In 2019, according to the Census Bureau, the average cost to buy a single-family home was $383,900. That’s substantially more than the $280,000 to $310,000 average for building a home, but these prices aren’t as straightforward as they might appear. So here, we’ll break down the financial pros and cons of buying an existing home vs. building your own.
Advantages Of Building
Customization comes with many advantages, including the fact that you’ll only pay for what you want. For example, an existing home in the right neighbourhood might come with premium features that you don’t care about, like a finished basement or a swimming pool, but that factor largely in the purchase price. Additionally, when you build to your specifications, you won’t need to think about paying for renovations when you move in.
Building new also means new appliances and systems, which means everything is still under warranty when you move in. So you won’t have to figure high maintenance costs into your budget for several years to come. New heating equipment and building materials are also substantially more energy-efficient, saving you heating and cooling costs.
Advantages Of Buying
For many people, buying an existing home may be worth it just for the reduced hassle, but it also has financial benefits. Perhaps most notably, land and landscaping are included. Yes, the NAHB reported the average building cost to be $296,652, but that’s not including the $89,540 for a finished lot, bringing the total price for new construction to $386,192—comparable to the price of buying an existing home.
Additionally, existing homes come with mature landscaping, including trees and other greenery that can save you quite a bit on air conditioning costs if you live somewhere warm. Finally, when you buy a home, you have context for the sale price of the house. You can see whether it has appreciated or depreciated in value over time to help you predict the value it will have in the future. You have to hope your location and design choices aren’t part of a short-lived fad with new home construction.
There’s a lot to take into account when deciding whether to build your own home. However, there’s plenty of information out there, including real estate calculators, that can give you a more specific estimate of cost-per-square-foot to build in individual zip codes. In addition, a little bit of research can give you a better picture of what you’re committing to financially.
What You Can Afford With Your Budget
The nice thing about building your own house is you don’t have to adhere to someone else’s vision. You’re in charge! And that means you can be creative in finding ways to keep your costs down. Here are approaches for every budget:
If Your Budget Is Under $100,000
Tiny is big these days! Even Ikea has gotten into the tiny house business. Having someone build a tiny home for you costs about $27,000 to $46,000 — but you can build one yourself for less.
These dwellings typically sit on trailers, so they are mobile. Tiny houses are generally considered to be less than 600 square feet.
You do need to find or rent the land to place them and meet the building codes of that area, but they are an affordable option.
However, suppose you want higher-end materials and luxury appliances or want to further customize. In that case, tiny homes can run up to $150,000, as seen in the ones built by Tiny Heirloom and featured on HGTV’s Tiny Luxury.
If Your Budget Is Under $150,000
If you don’t want to go tiny, you can still save money by going small. Small houses are about 1,000 square feet and cost about $125,000 to build.
These homes typically consist of two small bedrooms and living space. They may also have one bedroom, with roomier common areas or bathroom space, or three small bedrooms. The exact cost and what you can get will vary depending on the region where you’re building and the materials and labour costs.
Another affordable option is a pole-barn house — a barn-like structure supported by poles driven into the ground. As with any house, the price will vary greatly depending on size and location, but you can expect a pole-barn house to cost roughly $113,000. That includes the house itself ($60,000), plus other costs like plumbing, permits, and electricity. The total doesn’t include labour, however.
Another idea that could work with your budget: shipping container homes. Yes, shipping containers are not just used for transporting goods on ships, trucks, and trains; now, they’re being used as trendy — if a bit blocky — homes for people looking to occupy a smaller footprint. Basic homes can run from $10,000 to $35,000, while larger homes may run closer to the $100,000 to $175,000 range.
If Your Budget Is Under $200,000
On average, you can build a modern home of about 1,000 to 2,000 square feet with this budget. This equates to a one- to four-bedroom home, which can cost as little as $90,000 (but up to $500,000). So it much depends on how you use the square footage you can afford!
If Your Budget Is Under $300,000
You can get up to 3,000 square feet of construction with this budget. A three-bedroom home would fit into this budget, as the average cost is between $180,000 and $400,000 to build, or you could bump up the high-end appliances and finishes on a two-bedroom home.
Another option is a modular home, a type of living space that comes pre-assembled. These homes typically cost about $100 to $200 per square foot, which translates to an average of $270,000 for a 1,800-square-foot home.
If Your Budget Is Under $400,000
You could build a four-bedroom home for this budget, which typically costs $200,000 to $500,000 or up to 4,000 square feet.
If Your Budget Is Under $500,000
With a half a million dollars budget, you can more comfortably construct a four-bedroom home or up to 5,000 square feet. Or you could go for a smaller home with more luxury — think granite countertops, hardwood floors, and high-end appliances.
If Your Budget Is Under $1 Million
With this cushy budget, you have a lot to work with. This is where you can construct a 5,000-square-foot home or a luxurious smaller home with aspirational flooring, design, cabinets, and appliances in a more expensive region of the United States.