How Much Does It Cost to Build a House?

If you have carefully considered the differences between building a house and buying a house and have settled for building one, then you may be curious to know how much such a venture is going to cost you. Let’s break it to you – the cost of building a house is high! But this cost may vary with the property type, location, materials used, and cost of services rendered.

However, while this cost is high and requires time and effort, building a house is usually worth it in the end. Moreover, by building your own house, you get to choose how you want the structure of the house to be. You can also add whatever it is you want to the house.

Since the cost comes before the building, let’s now examine how much it costs to build a house.

The Cost of Building a House

The average cost of building a house is between $100 and $200 for every square foot. So, for a 3,000 square-foot house, you can expect to spend between $300,000 and $600,000 for building costs. Meanwhile, if you want a custom home or luxury home, it will cost you between $200 and $500 for every square foot of the home. 

Labor costs will usually take up about 40% of the total building cost and will include costs of acquiring permits, cost of materials, and design fees. 

Before You Call a Building Contractor

Here are a few things you to do before calling a contractor:

Find a Good Property

Some people prefer to go property hunting themselves while others just employ the services of a real estate agent. In property hunting, you look out for how accessible the property will be, how developed the area is, the neighborhood, etc.

If you would rather not do this on your own or do not know how to go about it, you can talk to a real estate agent. However, even if you will be hiring a real estate agent, don’t hands-off the process and leave it to the agent completely. Give your real estate agent a brief on what to look out for and keep in touch with them.

Draw Up a Plan

Once you’ve secured a property, the next step is to draw up a plan. Prepare a budget you are ready to work with and present it to your contractor. At this point, ensure that you have a concrete answer to the question, “What type of house do I want exactly?” 

Write down your answers and share your vision with your contractor. This is important if you want to avoid change orders where something will need to be added or taken out of the original contract. Change orders are risky because they can impact ongoing projects negatively.

Building Stages that Affect the Overall Cost 

There are several stages of homebuilding. By identifying these stages, you can estimate how much money you will need to spend. These stages include site work, foundation, framing, exterior finishes, major systems, interior finishes, cost of miscellaneous construction, and sales price. 

Let’s examine each of these stages:

Site Work

Site work includes inspections, building plans, and permits. At this stage, various levels of tests are done on the land. The land will be surveyed, reports such as soil reports will be run on it, you will need to get permits from the government office in that location and of course, also get an architect to draw up your building plan.

When choosing an architect, it is better to go with one that has foundational knowledge of the building process. This way, they can collaborate with your contractor to get the best outcome.


At the foundation level, a lot of excavating, clearing, and leveling will be done. Because you will be excavating and breaking the ground, you will need experts in this field. Some of them have the high-duty equipment that is required for the job. If there’s any equipment that they don’t have and is necessary for the building process, you will need to rent it.

Meanwhile, if there are large rocks under the property, excavation costs may increase.

After this, the builders will begin to lay the foundation. Meanwhile, if the house you want has a basement, you will need to pay more on a cost per square foot basis. 


The framing stage of a house is the part where the skeletal form of the house is built. After it comes sheathing which is used to cover the frame. 

Exterior Finishes

This includes installing the exterior walls. These walls are built to support the structure of the building. 

Other exterior finishes include doorway and window installations.

Utility Systems

This involves setting up basic utility connections such as electricity, water, heating, ventilation, air conditioning, and sewer systems.

Interior Finishes

This includes the floors, doors, countertops, painting, insulation, lighting, etc.

At this stage, there are usually specifics. Some materials cost more than others so consider this in addition to the cost of interior finishes.

Miscellaneous Costs

These costs are usually not in the budget. They are unforeseen costs that you may incur in the course of the project. An example is traveling costs. Your contractor might need to run a few errands in the course of doing his job. Consider miscellaneous costs like this and ensure that you have a contingency reserve to accommodate such costs when they come up. 


One look at how much it costs to build a house costs can make anyone reconsider and decide to buy instead. For some, it is the convenience that comes with buying a house that they are after.

Regardless, when you make up your mind to build yours, contact an expert house builder. You deserve to get a ton of value from the huge sum of money you’ll be spending.

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