What’s the Cost of Building a House? [And What Factors Play a Role]


Perhaps you’ve been planning to build a house but don’t know how much it costs. Of course, building a home is not easy or cheap. But how much does it cost to build a house? This guide addresses the specific costs of building a house.

How Much Does It Cost to Build a House?

Anyone embarking on the journey of building their own house wishes to know (at least) the average cost of doing so. Many new types of homes hit the market in 2021—from self-sustaining ones to upcycled shipping containers and smart houses, with prices varying from $30,000 to several million.

Today, the average cost to build a house is around $300,000—or approximately $100 to $155 per square foot (land excluded)—which includes only the building materials and process. The price, of course, depends on the location, number of bedrooms, and the style of the house.

DID YOU KNOW? Living off-grid is becoming more popular, with the average cost to build a self-sustaining house at $90,600, which is worth the money in the long run (The DIY Life).

Cost Factors

It’s impossible to give an exact figure as to how much building a house cost, but consider the following factors that would influence the price.


The number one factor that determines the price of a house is the land you choose. If you purchase land that requires work, then costs quickly accrue. But if you find land that is clear of trees, for instance, then you’ll spend far less on the land. Of course, the price of the land also depends on the location and if utilities already exist on site.

House Size and Design 

Generally, the cost of a house depends on how large it is. A simple, smaller house will cost less. The cost of your house will also significantly depend on your house design—not its decor but the shape and design of it. For instance, a house with more hallways and corners is bound to cost more than one with a more straightforward layout, e.g., a one-floor square design with fewer hallways.

House Plans

Once you’ve decided on the land and size of your home, the house plans also are instrumental in determining the cost of building a house. These plans should present a clear overview of what the house would look like. You can buy pre-designed house blueprints for a minimum price. But if you opt for a unique home that represents you and your lifestyle, it’s best to hire an architect who will draw up floor plans specially designed for you. Architect fees may range from 8% to 12% of the construction cost.


One of the most critical factors that influence the costs of building a house is housing permits. These permits authorize strict standards of how the house should be built and ensure the safety of the work. Expect to pay around $3,000 for the permits.

The Foundation

After the plans are drawn up and standards are met, it’s time to break ground. A great deal of your money will go into building the house foundation. If you want a basement or the house requires additional landscaping to eliminate flooding, the cost will increase. Foundations typically cost $4,000 to $25,000, depending on home requirements.


Once the foundation has been set, the next step is framing—where the real work begins, and your house finally begins to take shape. The framing is the house’s skeleton that supports such finishing features as the walls, windows, doors, and roof. As a result, framing can be the highest building house cost.

External Elements

When building a new home, you want your house’s interior and external components to be appealing—the windows, roofing, and facade of your house all impact the price of your home. The cost of installing the external elements should be around $41,000. But once you’ve installed these, the chances of changing the exterior are slim.

Plumbing, HVAC, and Electricity Installation

Plumbing, electricity and heating, ventilation, and air conditioning (HVAC) are utilities that a house cannot do without. These installation systems significantly impact the house building cost. The work of installing these is costly, and since these systems are crucial for your home, it’s not an area where you can cut costs.

Interior Finishes

Typically, interior finishes cost less than exterior finishes—unless, of course, you opt for high-end builds and decide on luxury decor. Interior finishes include materials and devices used to cover the interior of the framing structure. It’s aesthetic decor that makes your house feel like home by applying, for example, plaster, paint, woodwork, flooring, or wallpaper.


A cost to build a home may include some additions that might pop up, e.g., a shabby-chic (worn, aged look) driveway leading directly to the garage or patio, which could influence the overall house cost.

Labor Cost   

Professional labor is also costly. Expect the labor cost to be between 30% and 60% of the project costs.


Location is an essential factor when determining where to build your own house. The location has a considerable impact on the overall house cost—the closer your home is to a market or nearest transit line, for example, the more expensive the house.

Key Takeaways

The average price to build a house is $300,000.
You need plans and permits before beginning the building process.
Exterior finishes generally cost a lot more than interior finishes.
Plumbing, HVAC, and electricity greatly influence the cost of building a home.

Must-Know Information 

You wish to build your own house but haven’t gathered all the necessary information to begin the process. We’ve compiled the following essential info to help before purchasing a home.

  • Estimates 

Not every company’s estimate will align with your planned costs. So continue to ask for estimates until you’ve made a thoroughly informed decision.

  • Comparisons 

Following the housing market—comparing prices and location—can be stressful. Whether to buy an existing home or start from scratch can be equally trying. Is it cheaper to build a house or buy one? All these considerations have pros and cons, but you must decide what best fits your needs.

  • Budgets

Building a house doesn’t only include slapping brick and mortar together. You need to think smart rather than throw money around. Consider your budget long before you start building your dream house. Determine if the price to build a house aligns with your budget. Think of what type of house you can afford; building a home concerns financial stability, not bankruptcy. So stick within your budget, and you’ll be set to go.

  • Unexpected Expenses

Building your dream house is an exciting process that you want to be involved in as much as possible. But not everything goes as planned. Be aware of additional, hidden expenses when building a house because costs are not fixed. So put some extra cash aside that could cover such unforeseen expenses.

  • Loans

Sometimes, you need additional help from a bank to cover the cost of building a home. In some cases, additional financing is necessary because costs may quickly accrue and exhaust your savings when building a house. Home equity loans, construction loans, or even loans for those with bad credit are good options to consider.

  • Real Estate Trends

Don’t immediately purchase a house when you’ve finally saved enough money. Instead, wait and keep an eye on the real estate trends because house prices often go up and down—sometimes drastically.

DID YOU KNOW? At the beginning of 2021, home prices increased 20% from 2020, which was beneficial for sellers but forced many potential buyers to back off (RAMSEY SOLUTIONS).


Many typically spend more than the average $300,000 price to build a house. Nonetheless, it’s essential to keep an eye on the factors that determine the price of building a house if you want to create your own peaceful abode.


How much does it cost to build a mansion?

The average price of building a mansion is $1.5 million. But if you wish to build a luxury mansion, the cost ranges between $500 and $700 per square foot ($4 million to $5.6 million for an 8,000 ft2 property).

How much is it to build a house?

How much does it cost to build a house? The price of building a house varies from $30,000 to several million. (The average price of building a house is $300,000.)


Alex is an IT wizz gone SEO gone fire-juggler. We’re not even joking. When he isn’t researching why one personal loan is better than the other and which piece of hardware you should buy next, he’s rollerblading or selling homes (because he does that, too, the smarty-pants).

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