How Much Does it Cost to Build a House (2023)

How Much Does it Cost to Build a House (1)

We receive dozens of emails asking about construction costs for a new home each week. The problem is there are so many variables involved in the new construction equation that there is no simple answer to what an average cost will be. Factors such as size, location, foundation type, personal upgrades, or higher-end finishes can quickly increase your all in cost of building a new house.

At DEN we have invested heavily in being able to provide relevant cost estimates for all of our builds and house plans, using Gordian as our source of truth for current national pricing, build costs, and home prices. Gordian bases their dataset on 30,000 hours of annual research and verifying costs for materials, labor, and equipment across their member network. This is the level of research and consideration that we feel is necessary to help our community better understand their own costs for a new build.

DEN’s Construction Cost Estimator

You can use DEN’s Construction Cost Calculator as an additional reference point for budgeting out your own build.

As a result ofGordian data services, we provide a cost estimation for all of our designs that can help you understand a good baseline to begin your research with. Based on the latest construction industry data, which is subject to change at any moment, we suggest using a national average of $244.50 per square foot for budgeting purposes. Therefore your total cost for a 168 square foot cabin will be approximately $41,076 when using a general contractor to handle the skilled work.

We encourage our customers to understand that this number is so variable, depending on where you’re building, that it should really only be used as a reference point. Like we mentioned above, there’s no one source of truth that can tell you exactly how much your build will cost with any level of certainty, until you’ve finished the build itself.

You can also tour a recent client's A-frame cabin project while he shows you the finished results and explains some of the cost of construction and design choices that he chose.

Understanding Construction Costs

The best place to start is to understand what types of costs or are included when building a house. According to the NewHomeSource website, construction costs for tiny houses and homes fall into one of three categories.

  1. Administration Costs include jurisdictional or agency fees for construction permits, plan checks, and building inspections. However, if you hire outside professionals such as a realtor, architect, or designer, those fees are typically not included when calculating your cabin construction costs with a builder or contractor.

  2. Material Costs are a crucial component in the construction cost equation. However, their prices vary immensely due to quality, performance, longevity, and even local availability.

    1. Pressure-treated lumber always costs more than untreated lumber

      (Video) Cost to Build a House 2022

    2. Metal roofing always cost more than asphalt shingles

    3. Cement board siding is more expensive than wood siding

      Many building material suppliers are dealing with material shortages as the manufacturing sector races to replenish supply house inventories around the globe.

  1. Labor Costs are the other major factor when determining your A-frame cabin construction costs. Less volatile than material prices, labor rates vary depending on their own set of sub-factors such as project size, location, and the project's completion schedule.

You'll probably see terms such as builder's standard when talking about construction costs, but what does that mean? It refers to good quality products and finishes that pass the minimum code requirements of the local building department. If you compare good, better, and best options, Builder's Standard meets the good criteria.

How Much Does it Cost to Build a House (3)

Cabin construction costs typically don't include several items such as:

  • Property or land purchase costs

  • Earthwork for well, septic, or utility connections

  • FFE items(furniture, fixtures, and equipment)

  • High-end design or interior finish upgrades and exterior finish upgrades

  • Off-grid living systems

    (Video) Cost to Build a House

  • Landscaping design

  • Additional add-ons and additional costs

House Per Square Foot Costs

Do a Google search for home construction costs and you'll see results like "Our company can build an average sized home, on a basically level lot, with standard finishes and amenities, for $XXX to $XXX per square foot."

Ideally, after you multiply your home square footage by both the low and the high numbers, you should know the overall cost range needed for your specific project. But unfortunately, these types of formulas don't work as well as you might think.

Before you start punching numbers in your calculator app, let's take another look at the critical components of that average price budget formula again. Let’s take a closer look at those terms mentioned above: Average sized home, basically level lot, and standard finishes and amenities.

How Much Does it Cost to Build a House (4)

Average-Sized Home

You might be wondering, just like we are, what is the square footage of an average-sized home? Well, for example, at DEN we offer plans that range from < 200 up to 2,000 square feet and beyond. Our answer to the "average-sized home" question wouldn’t necessarily be an average of those two numbers, but rather would probably be the floorplan we sell the most. The chances are that most other builders and vendors would follow a similar logic to answer this question. Ask three different vendors about average-sized homes, and you'll most likely get three completely different answers.

As the consumer doing your construction cost research, it might seem like you’re comparing apples to apples but until you know the company's unique definition for the term, you're really comparing apples to oranges.

We performed a quick search "average size home in [location]" to help demonstrate how much gray is involved with the term "average" anything:

The average size home in the US is 1,761 square feet

• The average size home in California is 1,625 square feet

• The average size home in Montana is 2,040 square feet

(Video) How Much Does It Cost To Build A House In 2022?

• The average size home in Hawaii is 1,308 square feet

• The average size home in Washington is 1,903 square feet

• The average size home in Florida is 1,694 square feet

Based on location alone, the average size home includes a 700 square foot variable to consider when calculating a range for your costs.

How Much Does it Cost to Build a House (5)

Basically Level Lot

Our biggest issue with this term is that it is 100% subjective, depending on who's assessing the property. As a potential buyer viewing a property, basically level might perfectly describe what you're seeing. That is, until the excavator arrives and informs you that the lot must be re-graded to properly drain water away from the location where you plan to build.

Other soil issues that impact your construction costs include the soil density and make-up. For example, if you're planning to install a septic system, you'll want loamy soil composed of sand, silt, and some clay for the drain field area. Bedrock just below the topsoil is problematic for installing a septic system and running utility service lines underground.

The last factor of the basically level lot scenario involves the soil's permeability. During the winter season, more porous soil can experience frost heaving, caused by ice forming within the soil particles and expanding upward. Frost heaving can easily damage underground services, concrete slab foundations, and foundation piers. As you can see, what appears to be a "basically level lot" can quickly escalate your excavation and site-prep activities and costs.

Standard Finishes and Amenities

Another highly subjective term, and without some background context, really doesn't provide any helpful information for the consumer. Standard is a synonym for average, usual, and typical, so my list of standard cabin amenities could include 3 bedrooms and 2 bathrooms. Your standard amenities might consist of a bathroom for every bedroom, plus a formal dining room. Of course, the contractor has their definition of standard amenities, possibly based on personal taste, completed projects, or something else entirely.

When considering construction costs, it doesn’t quite make sense that finishes get lumped in with amenities. So let's step into the kitchen for a moment to discuss a few of the finish options available there. Let’s take cabinetry for example.

Kitchen cabinet choices usually fall into three categories:

Stock cabinets are standard-sized prefab units assembled to fit the kitchen space and run from $60 to $200 per linear foot.

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Semi-custom cabinets allow for some customer customization and require a longer lead time to accommodate the extra work. As a result, you can expect this finish to cost from $100 to $650 per linear foot.

Custom cabinets are usually hand-made to the customer's specific sizes and requirements. Custom cabinets can range from $500 to $1,200 (and higher) per linear foot.

Your 30' length of kitchen cabinets could run from $6,000 to $36,000 based on the option chosen. So, what exactly is deemed as "standard" in the quote formula referenced above?

How Much Does it Cost to Build a House (6)

You can repeat this process with different finish options such as lighting, countertops, flooring, and even your doors and windows.You quickly get the idea how wide this range could be.

Construction Costs Misinformation and Where to Go from Here

As a team at DEN we have spent hours deep-diving through the latest data and stats, and here's the readily available information on the web we found when picking three states at random.

• The cost to build a cabin in Michigan ranges from $90-$150 per square foot

• The cost to build a cabin in Florida ranges from $141-$206 per square foot

• The cost to build a home in California ranges from $119-$357 per square foot

Just like the pages linked above, the Census Bureau provides highly accurate data but it's rarely. So, Census data is currently two years behind today's actual market costs. With these pages as examples, you can see that some sites keep their costs updated, but others don’t.

Most consumers don't realize how drastically material and labor costs have gone up recently, even during the pandemic alone. For decades, supply houses provided contractors with an annual price list to prepare their bids. Today, a contractor must check his material prices daily or weekly and request a project quote to lock in today's price for your project next month.

According to the National Association of Homebuilders; Over the past four months, lumber prices have nearly tripled, causing the cost of an average new single-family home to increase by more than $18,600 (according to NAHB pricing models). This lumber price hike has also added nearly $7,300 to the market value of the average new multifamily home.

(Video) Easily Estimate Your Cost to Build

As a result, the construction industry is moving to RSMeans data systems, like Gordian, for the latest construction data for bidding and procurement purposes. On November 2, 2021, Gordian reported, "In the past 12 months, more than 93% of all material costs, equipment prices, and labor wage rates have experienced a change. Increases have occurred in 71% of equipment prices and 98% of labor wages. 71% of construction material costs have increased, some specific prices rising greater than 50% over 2021 prices and continuing to fluctuate dramatically from quarter to quarter.”

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FAQs

How much does it cost to build a house UK 2022? ›

On average, building a new house costs between £1,800 and £3,000 per square metre. A two-bed house is estimated to cost between £190,000 to £280,000 to build. A three-bed house is estimated to cost between £245,000 to £365,000. A four-bed house is estimated to cost between £295,000 to £440,000 to build.

How much cheaper is it to build a house? ›

Building your own home can be much cheaper than buying an existing house. If you do the work yourself, you can lower costs by up to 40%. But even hiring builders to do most of the work can save money, while project managing the build can also significantly cut costs.

What costs most when building a house? ›

Framing is the highest material cost for most new home builds. High-quantity lumber framing averages $33,000 for a home in the U.S. This includes floors, walls and roof trusses.

How much would it cost to build a 3 bedroom house from scratch UK? ›

Average cost of building a 3 bedroom house

The typical size of a three-bedroom home can range from around 90 square metres to 120 square metres, meaning the cost of building a three-bedroom house can range from around £126,000 to £300,000 with an average cost of around £213,000.

Is it better to build or buy a house 2022? ›

Is it cheaper to build or buy a house? As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.

How can I save money to build a house in 2022? ›

The cheapest way to build a house in 2022 is to take a hands-on, DIY approach. That means planning and budgeting ahead, selecting affordable materials, and doing some of the work yourself, whenever possible. Having a house of your own is great, but having a home that was custom built to your specs is even better.

How can I save money when building a house? ›

Value Engineering
  1. Reducing Square Footage. One way to dramatically reduce costs is to just reduce the square footage of the entire home. ...
  2. Choosing a Stock Design. ...
  3. Reducing Lineal Feet of Logs. ...
  4. Opt for a Simple Roof System. ...
  5. Use Drywall on Interior. ...
  6. More Modest Kitchen. ...
  7. Don't Take a Bath on Your Bath. ...
  8. Avoid Change Orders.

Will building materials go down in 2022? ›

In July 2022, the year-over-year change in materials and components for construction, excluding capital investment, labor, and imports was 14.8%. The growth rate of increase had dropped, but that has changed. The August figures show that combined materials and components in construction were up 15.2% year over year.

Is it cheaper to build up or out? ›

Building up is always the least expensive option for increasing your home's square-footage because it requires less material and labor. For example, if you have 1,000 sq. feet on the main level and want to add 1,000 sq. feet as a second floor, all you have to do is add more wood and framing labor.

What is the most expensive part of a house? ›

The Foundation

Pouring a foundation is expensive; often it is one of the most expensive parts of building a home, usually over most of the items on this list. A larger home's foundation will be more expensive to pour. The type of foundation and the climate you're building in will also matter.

Is now a good time to build a house? ›

If you plan to commence building a new home in 2022, prepare yourself for a major downturn in the construction industry over the next few years, as home builders struggle with the rising costs of raw materials and workforce shortages, along with those supply-chain delays.

How do you calculate building costs? ›

Cost of construction = area of plot x construction rate per sq ft. To arrive at the construction rate per square foot, you must include the following: Construction material: Cement, steel, sand, gravel, finishing, color, tiles, bricks, fittings, windows, doors, plumbing, sanitary, and electrical.

Is it cheaper to build a square house? ›

Design of Home

Simple, rectangular-shaped rooms are easier to build, and save on construction costs. Generally, square-shaped homes are more economical to build than rectangular-shaped homes.

Should I wait until 2023 to build a house? ›

Interest rates and building costs are not forecasted to decrease into 2023, and could even continue rising. The market is volatile and world events are unpredictable, so it is likely that building sooner could save you money in the long run.

Should I build in 2022 or wait? ›

Yes 2022 can still be a good time to build your custom forever home, despite rising costs and interest rates. Building your custom home is an investment in your family's lifestyle and should be looked at as a long term financial & lifestyle decision of living in your forever home for 5 or more years.

Will 2022 be a good time to build a house? ›

Barring any unforeseen calamities, 2022 could be a good year for homebuilders and buyers. However, the effects of inflation, new COVID variants, or other market disruptions could change everything.

How much should I have saved before building a house? ›

The bank usually wants you to make a down payment of 20% of either: the cost to build. or. the appraised value.

What is the cheapest kind of home to build? ›

Cheapest Types of Homes to Build
  1. Shipping Container Home. Living in a shipping container may not sound like the ideal situation on the surface, but shipping container homes have become more popular in recent years. ...
  2. Tiny House. ...
  3. Off Grid Homes. ...
  4. Ranch-Style House.
28 Aug 2022

Will building materials go down in 2023? ›

Materials Prices Slide

The S&P Global third-quarter forecast for softwood lumber is virtually unchanged from the second-quarter forecast, expected to fall 4.1% in 2022 and drop another 28% in the next year. Plywood prices are predicted to fall 1.1% this year, with an additional drop of 25.4% in 2023.

How many months does it take to build a house? ›

On average, it takes seven months to build a house from start to finish, according to a 2019 U.S. Census Bureau report. But you may also need to include time for an architect to draw up plans (1–4 months). Then tack on another month to get your project authorized before shovels can hit the dirt.

Will construction costs go up in 2022? ›

The world's largest real estate company, Coldwell Banker Richard Ellis (CBRE), has predicted a 14.1% year-on-year increase in US construction costs by the close of 2022, citing financial pressures such as inflation, labour shortages, supply chain challenges, Covid-19 and Russia's invasion of Ukraine.

What is the best time to build a house? ›

Among all the seasons, spring is usually the optimum time to start construction on a new house due to faster timelines, better weather conditions, optimal windows of opportunity for landscape installation, and fewer delays in the building process.

Are lumber prices expected to drop in 2022? ›

As a result of this and other factors, Fastmarkets RISI predicts U.S. softwood lumber consumption will drop 1.4% year over year in 2022. But Jalbert noted in a July research report that this is still a “modest” drop by historical standards, and that it's too soon to call a recession in the lumber market.

Will prices ever go back down? ›

Caldwell estimates that the inflation rate will average around 1.5% between 2023 and 2025. “While consensus has largely given up on the 'transitory' story for inflation, we still think most of the sources of today's high inflation will abate, and even unwind in impact, over the next few years,” Caldwell says.

What building material will last the longest? ›

Stone lasts a very long time and is one of the most durable materials to use in building and construction. It can be more difficult to move and transport around due to its weight, but it is naturally resistant to the elements and is also aesthetically appealing.

Is a basement or 2nd story cheaper? ›

Generally speaking, building up tends to be less expensive than a basement. That said, not too long ago, lumber was at an all-time high and basements were the better option. Check with your builder and they can advise you on the pros, cons, and cost of each.

Do you lose money on a new build? ›

New build premium pricing

Just like a new car, a new build house or flat will depreciate in price the minute you turn the key in the door. Even in a rising property market, you may not get your money back when you buy a new build home if you have to sell within a year or two.

What is cheaper brick or wood? ›

Brick houses generally cost more than wooden ones, but they also have a higher resale value.

What makes a house so expensive? ›

One of the main reasons home prices have increased over time, especially in recent years, is low interest rates. When interest rates decrease, the cost of financing a home goes down, and more aspiring homeowners are inclined to purchase property. This increase in demand almost always increases overall home prices.

How can building costs be reduced? ›

10 ways to reduce your project build costs
  1. Hire an architect. Plain and simple. ...
  2. Plan, don't guess. ...
  3. Less corners on exterior walls. ...
  4. Use local materials. ...
  5. Material continuity. ...
  6. Extra trade requirements. ...
  7. Become best friends with your neighbour. ...
  8. Don't overbuild for your neighbourhood.
23 Mar 2017

What is the lucky month to build a house 2022? ›

Auspicious Days and Months for Building, Renovating and Buying A House in 2022. Based on Feng Shui, the best months in 2022 to start building or buying a house are August, September, and October and the best days are 3, 7, 11, 20, 24, 27, and 29.

What is the lifespan of a new build house? ›

This is largely debated within the construction industry as it is really dependant on the materials that are used, the quality of the workmanship and the maintenance that is required and followed through on. On average, the generally expected and acceptable lifespan of a home should last at least 60 years.

How long are houses built to last? ›

We see that, when it comes to material failure, most buildings do not have to worry about it until they are 90-100 years old. This is good news, as these numbers indicate the maximum lifespan of the home. If you don't get that lifespan, it will be because you failed to take care of your home properly.

How much does it cost to build a house 1200 sq ft? ›

1200 sq ft House Estimate

Medium-quality house construction costs Rs. 1,000 to 1,100 per square foot. So for a 1,200 square feet house, it'll cost you around Rs. 12L to 13.20L.

How do you calculate labor cost to build a house? ›

Determining the construction labor cost

They are working 8-hour shifts, which will translate into a 40 hour work week. Crew's hourly rate X 3 (amount of workers) X 6 (number of weeks) X 40 (hours per week) = cost of the project.

What costs are included in cost of building? ›

5.1 Costs Associated with Constructed Facilities
  • Land rent, if applicable.
  • Operating staff.
  • Labor and material for maintenance and repairs.
  • Periodic renovations.
  • Insurance and taxes.
  • Financing costs.
  • Utilities.
  • Owner's other expenses.

Is it cheaper to build a 1.5 or 2 story house? ›

People typically expect a 2-story home to be more expensive than a 1-story, but that's not always the case. A 1.5-story home is actually the most expensive.

What is the best shape to build a house? ›

The hexagon is the strongest shape known. Not many people know this but if you want something to hold a lot of weight pick a hexagon. Hexagonal patterns are prevalent in nature due to their efficiency.

Is it really expensive to build a house? ›

The total cost of building a custom home can also vary quite a bit depending on the choices you make, the building materials you use, labor costs and even what region of the country you're in. Though $282,299 is the average, most homeowners spend $114,209 – $450,824 to build their homes.

Will construction costs go down in 2022 UK? ›

The shortage of materials such as timber, plaster and steel since the start of 2021 has led to major supply chain issues for those working on self build or renovation projects. But product availability has improved across most categories in 2022. However prices remain a rising problem.

Is it cheaper to build a house in 2022? ›

It is anticipated that interest rates will be on a rising trend throughout 2022 and costs will continue to increase, although the cost increases will be at a more normalized rate. It is highly unlikely that it will be less expensive to build in the future.

How much does it cost to frame a house in 2022? ›

Share: The average cost to frame a house ranges from $7 – $16 per square foot1 or $11,200 – $48,0003 for homes between 1,600 and 3,000 square feet.

Will cost to build go down in 2022? ›

Will construction costs go down in 2022? The short answer is that it's not likely to happen. It was predicted by many economists in 2021 that the overall economy would have a slow recovery and that a housing crash could occur. On both of these points, it appears that economists have been wrong.

Are building materials going down in 2022? ›

In July 2022, the year-over-year change in materials and components for construction, excluding capital investment, labor, and imports was 14.8%. The growth rate of increase had dropped, but that has changed. The August figures show that combined materials and components in construction were up 15.2% year over year.

Will building materials go down in 2023? ›

Materials Prices Slide

The S&P Global third-quarter forecast for softwood lumber is virtually unchanged from the second-quarter forecast, expected to fall 4.1% in 2022 and drop another 28% in the next year. Plywood prices are predicted to fall 1.1% this year, with an additional drop of 25.4% in 2023.

What will houses cost in 2030 UK? ›

UK house prices are expected to rise by 30% over the next ten years
Region20212030
London35.036.8
Rest of England33.134.6
3 Sept 2021

Should I wait until 2023 to build a house? ›

Interest rates and building costs are not forecasted to decrease into 2023, and could even continue rising. The market is volatile and world events are unpredictable, so it is likely that building sooner could save you money in the long run.

Will 2022 be a good time to build a house? ›

Barring any unforeseen calamities, 2022 could be a good year for homebuilders and buyers. However, the effects of inflation, new COVID variants, or other market disruptions could change everything.

What is the lucky month to build a house 2022? ›

Auspicious Days and Months for Building, Renovating and Buying A House in 2022. Based on Feng Shui, the best months in 2022 to start building or buying a house are August, September, and October and the best days are 3, 7, 11, 20, 24, 27, and 29.

How much does it cost to frame a 2000 sq ft house? ›

Full House Framing Prices

On average, a 2,000 square foot home will cost between $14,000 and $32,000 to fully frame. You can add an extra $4,000 to $16,000 if you plan to include sheathing and a house wrap.

How much lumber do I need for a 2000 square foot house? ›

House Construction

To keep it simple and stick to a good average, say that 6.3 board feet are required for every square foot of house. So, a 1,000 square foot home would need 6,300 board feet to complete, while 12,600 board feet would be necessary for a 2,000 square foot home.

How long does it take to frame a 2000 sq ft house? ›

Framing a home usually takes 5-8 weeks.

What will houses be worth in 2030? ›

According to RenoFi, the average price of a single-family home in the U.S. could reach $382,000 by 2030.

Should I wait to build a house? ›

Waiting to build your dream home means you could end up paying higher building costs or higher interest rates down the line. Prudent buyers must weigh their options carefully. Consider your budget and whether you plan to stay in the home long enough to build up enough equity to make money once you sell.

Why are new builds so expensive? ›

Higher building and construction costs, soaring demand, and lower energy bills are just some of the reasons new-build homes are rising at a much faster rate than existing properties.

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