You’re our first priority.
Every time.
We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners.
How Much Does It Cost to Build a House?
Writer | Home equity, first-time home buying, home warranties
Assigning Editor | Homebuying, savings and banking products
Some or all of the mortgage lenders featured on our site are advertising partners of NerdWallet, but this does not influence our evaluations, lender star ratings or the order in which lenders are listed on the page. Our opinions are our own. Here is a list of our partners.
Visit your My NerdWallet Settings page to see all the writers you're following.
The cost to build a house depends on a variety of factors, including the size of the home and where it’s built.
Breaking down the costs can put your budget into perspective, and it may help determine whether building or buying is the right move for you.
Table of Contents
National average cost
The national average cost to build a home in 2024 is about $392,000, with a normal range of about $137,000 to $523,000, according to data from the National Association of Home Builders (NAHB). Of course, depending on your specifications, it could be much more expensive.
How location affects costs
How much you'll pay to build your new home can vary significantly depending on your state. For instance, Alaska, California, Connecticut and Hawaii are among the most expensive states to build a home in.
The least expensive states to build in include Arkansas, Iowa, Kansas and South Dakota.
Cost by size
The size of your home will affect how much it costs to build. You can expect to spend about $100 to $155 per square foot, according to data from HomeGuide. The median home size in the U.S. is 1,859 sq. ft. as of May 2024, according to the Federal Reserve Bank of St. Louis. Here are the average costs of homes broken down by square footage.
Cost by number of bedrooms
In addition to the home’s overall size, more bedrooms can lead to a higher price tag. According to Angi, homebuilders spend an average of:
$90,000 to $150,000 for a two-bedroom house.
$150,000 to $360,000 for a three-bedroom house (approximately double the range of a two-bedroom).
$285,000 and $420,000 for a four-bedroom (approximately triple the range of a two-bedroom).
Although they run up the price tag, 45% of the new houses completed in 2023 had four or more bedrooms, according to the Census Bureau, while only 11% had one or two.
Cost by project
Building a house involves many steps, from purchasing the land to installing plumbing. Here are average costs for various project elements that add up to your final bill.
Labor costs
Hiring professionals to construct your home may account for the largest share of your homebuilding costs — about 30% to 50%, according to HomeAdvisor.
The cost of labor varies across the country and depends on the size and complexity of your design. You may be charged by the hour or by the square foot. Here are some of the professionals you may need to hire, with corresponding cost estimates from Angi and HomeAdvisor.
Structural engineer: $100 to $200 per hour.
Draftspeople: $50 to $130 per hour.
House framer: $7 to $16 per square foot.
Roofer: $2 per square foot.
Plumber: $45 to $200 per hour.
Electrician: $50 to $100 per hour.
Contract and construction cost estimates may be lower than the final price, which can include additional expenses not related to building a house, like lot-finishing costs, financing costs, marketing costs and sales commissions.
Ways to finance your new home
Buying a new home from a builder means buying a new construction in a planned development. If you need to get a mortgage, it may be available from a lender that has partnered with the builder, and the process may be very similar to financing an existing home.
On the other hand, building a house from scratch means buying land, hiring an architect to design the house and then a builder to construct the home. If you can’t pay cash for the land and design of the house, you’ll need a construction loan.
Construction loan financing
Construction loans are short-term loans that finance the building of a home. There are three main types of construction loans:
A construction-to-permanent loan pays for the construction of your home. While the home is being built, you’re only required to pay interest. After the home is completed, your payments will include both interest and principal.
A construction-only loan covers just the cost of construction. It has to be paid off entirely when the building is complete, usually by a traditional mortgage. They typically have a term of one year.
A renovation construction loan covers the cost of purchasing a home and any major renovations with a single loan. The options for a conventional renovation construction loan are the Fannie Mae HomeStyle loan or the Freddie Mac CHOICE Renovation loan.
It can be more challenging to get approved for a construction loan compared with a typical purchase mortgage. Lenders view them as riskier because you can’t use the home as collateral, as it hasn’t been built yet.
If you need a construction loan, NerdWallet’s list of the best construction mortgage lenders can be a great place to start your search.
» MORE: How to get a construction loan
Should I build or buy?
The median price of an existing home was $419,300 as of May 2024, according to the National Association of Realtors. But, like construction costs, the price of an existing home varies by location. Whether you choose to buy or build may depend on which is the more economical choice in your area, and whether there are enough existing homes to choose from.
Budget considerations aside, there are other factors to consider when deciding whether to build or buy.
Time. Do you have the time and resources to devote to building a new home? If convenience is a priority, buying an existing home is likely the way to go.
Level of customization. If you have a highly specific vision, building a house will give you more flexibility than trying to find an existing home that meets your requirements.
Availability of choices. This applies to both buying and building. If available listings are few and far between in your chosen area, you may be inspired to build your own home. Alternatively, if you live in a dense area with few open lots, it might be more feasible to buy an existing home.
» MORE FOR CANADIAN READERS: How much does it cost to build a house?
