The average cost to build a house is $665,298, based on our market and industry research. However, costs can vary based on location, home size, materials, and customization. Additional expenses such as permits, labor, and utility connections can also impact the final price. This guide breaks down the key factors influencing home construction costs and what to expect during the building process.
The Average Cost To Build a House
According to the National Association of Home Builders (NAHB) 2024 Construction Cost Survey, the average cost to build a house is $665,298. When estimating the cost of building a new single-family home, it’s important to account for factors like location, materials, labor, and additional expenses such as permits and custom features—all of which can all influence the final price.
The House Itself
About 64.4% of the total cost of building a new single-family home goes toward construction expenses, with each component affecting the budget. Here’s a breakdown of some of the key costs:
- Major system rough-ins: This category covers installing essential systems like your HVAC, electrical, and plumbing. These installations averaged $82,319, or 19.2% of the overall budget.
- Framing: Framing involves constructing the structural framework of the home, including the roof frame, trusses, and sheathing. This stage averaged $70,982 and contributed 16.6% to the total construction cost.
- Foundation: This step covers excavation, pouring concrete, building retaining walls, and backfilling. Foundation work averaged $44,748, making up approximately 10.5% of the construction budget.
- Site work: The initial construction phase includes expenses for building permits, impact fees, inspections, engineering and architectural planning. In 2024, site work averaged $32,719, which accounted for about 7.6% of the total construction cost.
Exterior and Interior Finishes
After the basic frame is up and the major systems are in place, the next considerable expense is the exterior and interior finishes. These finishes comprise a large portion of the total construction cost and significantly impact the final budget. We’ll take a closer look at how they impact your final costs.
Exterior Finishes
Exterior finishes include wall siding, roofing, windows, doors, and other features that provide the home’s final look and structural protection. According to NAHB, the average cost of these finishes is $57,510, accounting for 13.4% of the total construction cost.
Interior Finishes
Interior finishes include elements like insulation, drywall, flooring, cabinets, countertops, and plumbing fixtures. Costs can vary based on materials, brands, and customizations. NAHB reports an average of $103,232 for interior finishes, representing 24.1% of total construction costs.
Land and Lot Costs
The cost of the lot where your home will be built is not included in base construction estimates. On average, a finished lot costs $91,057, accounting for 13.7% of the total home price.
Lot sizes for newly built homes have shrunk over time. According to NAHB, the average lot size is 20,907 square feet (0.48 acres), but urban lots tend to be smaller and more expensive than those in suburban or rural areas. Additional development costs will increase the overall expense if the lot is unfinished and lacks utility connections, including sewer, water, and electricity.
Even with a fully developed lot, additional investments in landscaping, outdoor structures, and driveway installation are often needed before moving in. NAHB estimates that site preparation and improvement costs average $32,719, making up 7.6% of total construction costs.
Building vs. Buying
Deciding between building a new home or buying an existing one comes down to cost, convenience, and long-term value. While buying appears more affordable upfront, new construction offers customization, modern energy-efficient features, and lower initial maintenance costs. Below, we break down the financial pros and cons of each choice.
Advantages of Building
One of the biggest advantages of building a home is the ability to fully customize every detail to suit your needs and preferences. Unlike buying an existing home, in which you might end up paying for features you don’t want, such as a finished basement or a large backyard, building a home allows you to design your space from the ground up. You can choose the layout, materials, finishes, and fixtures, ensuring that every aspect of your home reflects your lifestyle. This eliminates the need for costly renovations or remodeling after you move in.
A newly built home also comes with brand-new appliances, plumbing, electrical systems, and HVAC units, all of which include manufacturer warranty coverage. This means a higher likelihood of lower maintenance and repair costs in the first several years of homeownership. Unlike older homes, which may require immediate repairs or upgrades, new homes offer peace of mind and long-term cost savings.
Energy efficiency is another significant advantage of new construction. Modern building codes require higher energy-efficiency standards, meaning that new homes often feature better insulation, high-performance windows, and energy-efficient HVAC systems. These advancements reduce energy consumption, resulting in lower utility bills over time. In addition, smart home technology, such as automated lighting, security systems, and energy-efficient appliances, is easier to integrate into a new build than into an older home.
New homes also provide a safer and healthier living environment. They are built to current safety codes, reducing the risks associated with outdated electrical systems, lead paint, asbestos, and mold, issues commonly found in older homes. This ensures your home is not only modern and comfortable but also meets the latest safety and health standards.
Advantages of Buying
Buying an existing home is typically more affordable upfront than building a new one. It also eliminates additional costs associated with land acquisition, permits, and potential construction delays. If budget is a major concern, purchasing an existing home provides a more predictable and cost-effective option.
Another major advantage of buying a home is immediate availability. While building a house can take six months to over a year, purchasing an existing home allows for a faster move-in process. If you’re relocating for work, need to transition quickly, or want to avoid the costs of temporary housing, buying an existing home provides a more convenient solution.
Existing homes are often located in well-established neighborhoods with mature landscaping, developed infrastructure, and community amenities. Many existing homes come with fully grown trees and landscaped yards, which can save thousands of dollars in landscaping costs while also providing natural shade that reduces air conditioning expenses in warmer climates. Additionally, established neighborhoods usually have schools, parks, and shopping centers nearby, offering an attractive choice for families.
When buying a home, you can also benefit from historical price trends, which can provide insights into how much the home has appreciated or depreciated over time. This helps in predicting future resale value and ensures you’re making a sound investment. In contrast, the future value of a newly built home depends on market conditions, neighborhood development, and potential future demand, making long-term depreciation less predictable.