January 2, 2018

Average Cost to Build a House

Read more about Buying Your First Home

It costs builders an average of $311,022 to build a home today. But the average cost to buy a home is $468,318. More than half of the home's cost goes to the actual construction of it. The remaining costs go to financing, marketing, and profits.

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Keep reading to learn the average cost of building a home and where your money goes.

  • What is the average overall cost to build a house?
    It costs an average of $311,022 to build a single-family home. This is based on an average finished area of 2,802 square feet.

  • What is the average cost per square foot to build a home?
    We calculated an average of $111 per square foot to build a home. This figure is based on the historical 4% inflation per year for building costs and an average $103 per square foot in 2015.

  • What is the average cost to build a townhouse?
    The average townhouse measures 1,132 square feet. At $103 per square foot, it costs around $125,652 to build a townhouse.

  • How much does it cost to build a small house?
    A "small house" averages 1,500 square feet. The average cost to build a small house is $166,500.

  • What is the cost of a finished lot?
    The average cost of a finished lot is $92.086, given standard 4% inflation rates. This means the lot has gas and electric already piped through. It also includes the builder's financing cost to acquire the lot.

  • How much does it cost for a home's foundation?
    The average cost of a foundation is $36,176. This includes excavation of the site, pouring the foundation and retaining walls, and the backfill.

  • How much does it cost to build a 2,500 square foot home?
    The average cost to build a 2,500 square foot home is $277,500.

  • How much does it cost to build a 3,000 square foot home?
    The average cost to build a 3,000 square foot home today is $333,000.

  • How much does it cost to build a 4,000 square foot home?
    The average cost to build a 4,000 square foot home is $444,000.

  • What is the average lot cost per foot?
    Given an average rate of 4% inflation through the years, the average lot cost per foot today is $4.54.

  • How much does it cost to frame a house?
    The average cost to frame a house is $56,272.

  • How much does it cost to build the interior of a house?
    The average cost to build the interior of a home is $92,435. This includes insulation, drywall, trim, mirrors, painting, lighting, fireplace installation, cabinet and flooring finishing as well as appliance installation.

  • How much does it cost to build the exterior of a house?
    It costs an average of $46,992 to build the exterior of a house. This includes the walls, roof, windows, and doors.

  • How much does it cost to install the major mechanical systems on a house?
    It costs an average of $40,930 to install the plumbing, electrical and HVAC in a home.

  • How much does it cost to get a permit to build a home?
    The average cost of a builder's permit is $1,221 nationally. The size of the home and complexity of the plans determines the actual cost. Homeowners pay anywhere between $441 and $2,001 for the permit.

Breaking Down the Sales Price

  • What is the average sales price of a home?
    The average sales price of a single-family home in the U.S. is $468,318. That's around 38% more than the average cost to build a home.

  • How much of the average sales price of a home goes to the home's construction?
    61% of the average price of a home goes towards the home's construction. The remaining 39% is comprised of the cost of the lot, financing, overhead, sales commission, marketing, and profit.

  • How much of the average sales price of a home goes to the cost of the lot?
    The cost of the lot makes up 18% of the sales price of a home, leaving just 21% for the financing, overhead, sales commission, marketing, and profit.

  • How much of the price of a new home is builder profit on average?
    Surprisingly, only 9% of the home's sales price is made up of builder profit. On average, builders make a $42,000 profit on the average priced home.

  • How much of a new home's price covers the sales commission?
    Sales commission makes up only 3.2% of the price of a home. The average sales commission is around $15,000 on a house.

Home Dimensions

  • What is the average home size?
    Today, the average home size is 2,687 square feet. Home sizes have grown almost 40% since the 1970s.

  • What is the average lot size?
    The average lot is 20,129 square feet. This is equal to approximately half of one acre. The average lot size has been all over the board in recent years, though. The average lot size was smallest during 2013, when the average was just 15,167 square feet.

The Bottom Line

The cost to build a home has consistently risen around 4% each year. The actual cost to build your home depends on the amenities, size, and complexity of the plans. Two-story homes generally cost more to build than one-story homes with the same square footage. It also varies based on your location. On average, though, the cost to build a house is around $311,000 and the average sales price is in the mid-$400,000s. It's safe to say that no matter where you live, it pays to start saving for a home early in life.

Sources and References:

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Buying Your First Home


Average Cost of Moving


Why Owning is Better

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