Buying or building a house is one of the largest investments in many people’s lives. Properties in the USA have seen a steep increase in their prices over the last few years, so many people consider building a house rather than purchasing an existing property.
As of 2022, the average cost to build a house comes to around $295,000, but it ranges depending on location, type of house, and materials used.
The cost of building a house in the USA usually ranges from $120,000 to $450,000 although it is important to note that it is quite difficult to calculate how much it costs to build a house. The final price of building a house largely depends on what features are included in the house. For example, the number of bedrooms may affect the price of building a house drastically.
The cost of building a house with 1 bedroom is expected to fall in the range between $85,000 – $350,000 while a 2-bedroom house will have an expected price within the range from $100,000 – $450,000. In this case, an additional bedroom will cost on average somewhere between $15,000 – $100,000.
Different features of a property will contribute to the price change differently, so before building a house, you should understand what your budget will look like and what it is composed of. The breakdown of the costs incurred building a house may provide insights on the areas where money can be saved.
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Land Purchase and Preparation – $65,000
The first item that must be purchased when building a house is getting the land. The whole plan on how the property is to be built depends on what chunk of land is available and what amenities are available around. It might be the case that the land is not ready for building a house. For example, there may be a gas line missing on the land lot. In this case, the landlord has to contact the relevant authorities to build the gas line there.
On average, a future homeowner is expected to spend around $65,000 on a piece of land including all necessary developments. The price may range drastically from the average price, especially in expensive high-density areas like New York City. It is also important to note that some people who enjoy large backyards may be willing to spend more money to get a larger chunk of land. On the other hand, some people may look for an undeveloped piece of land to build a house and infrastructure from scratch. It is rare, but some people might be willing to get a better deal for land and develop it using their own resources to save money. Even though it is possible to develop a piece of land, inexperienced homeowners should avoid doing so because mistakes in design may lead to thousands of dollars in unnecessary expenses.
Planning And Getting Permits – $7,500
The next step in building a house is to plan it and get necessary permits from the government. This step will require a homeowner to hire architects and designers who can research what building codes the property must adhere to and provide a clear building project. All these contractors must be paid as the project progresses. In addition to that, if the desired project does not adhere to the zoning codes, then the homeowner may have to get permits from the city to complete the desired project. Depending on the city and state, these permits may contribute to the total cost of building a house.
It is expected that the planning step in building a house will cost around $7,500 in 2022. The price may vary depending on the area the project is taking place, but it does not vary too much. Because of that, even though a future homeowner may find it easier to cut costs in other areas of the project. A future homeowner should not try to save money bypassing the permits because it may lead to larger penalties and liabilities in the future.
Building the House – $50,000
Building the house requires building a foundation and the skeleton of the house. These two jobs will likely require two different teams as both, building the foundation and framing the house, are two large and independent projects.
Before framing starts, construction workers have to dig up the space for the foundation. When the space for the foundation is prepared, the workers have to pour concrete there to solidify and form the foundation for the house. This step might take some time because the concrete must solidify before framing may start. The cost of the foundation largely depends on the square footage of the foundation. The larger the square footage of the foundation, the larger the area that needs to be cleared and the more concrete the foundation will require. Both of these factors will contribute to a higher cost of building a foundation.
When the foundation is ready, it is time for building a house frame. This is a labor-intensive process as the skeleton must be constructed from scratch. The price for building a frame mostly depends on the square footage and the number of levels the house will have. Since each level requires its own skeleton built on top of another level, an additional floor may lead to a large increase in the costs of building a skeleton. Sometimes the increase may almost double the cost of building a skeleton.
The cost of this step largely depends on the house itself because depending on the size, number of floors, and number of rooms, the cost may change drastically. On average, the cost of building a foundation is around $15,000 while the cost of framing the house is around $35,000. The cost of this step varies greatly based on the structure of the house, so redesigning the house considering the costs of foundation and framing may help save some money.
Building Exterior and Essential Structures – $75,000
When the skeleton for the house is ready, construction workers may start working on the exterior and essential structures. Essential structures refer to the amenities that are required to maintain a house in habitable condition. These structures include plumbing, electricity, HVAC if necessary, etc. Building the exterior requires a lot of material that may end up quite expensive depending on the finishing materials used on the exterior. Building essential structures may also be quite expensive because it requires hiring experts and buying necessary materials to make the house habitable.
Building exterior includes installing siding on the exterior walls, windows, doors, roof, etc. When this step is done, the house should be fully covered from the outside. There should be no holes or any other open areas that are not intended to be open. When the exterior is finished, the house may look ready from the outside, but it still requires quite a bit of finishing inside.
When the exterior is finished, the house still looks empty inside without any structures in it. When the interior is insulated, the contractors can work on extending plumbing structures, electricity cables, and vents. These structures will be hidden behind the walls when the interior finishings are done.
Building Interior and Finishing – $100,000
Lastly, when the house can be considered habitable, the interior must be built. This is usually the most expensive part of building a house because people tend to choose more expensive finishing materials. In addition to that, furnishing the house and buying necessary appliances may also be quite expensive depending on the quality of items chosen.
The average cost of building an interior is around $100,000, but it may range greatly depending on the materials used. This is where a future homeowner can save money because of the variety of finishing materials available. It is possible to save thousands of dollars by using cheap but practical materials and buying slightly used appliances.
Total Cost of Building a House
There are many variables that affect the final cost of building a house. A future homeowner has to consider location, area wages, materials, house design, etc. Of course, it is possible to change some of these variables during the construction, but it is still very important to have a realistic budget when planning a house for the first time. Many deviations from the original plan may lead to unnecessary spending such as material replacement, so the better the plan is laid out from the beginning, the less likely a future homeowner will have to waste money. It is also very important to account for mistakes that may arise during the construction process because it may provide insurance from unexpected costs when the budget is tight.
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