July 12, 2024

KJ Home

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How Much Does It Cost To Build A House In 2023?

5 min read

Breaking Down The Costs Of Building A Home: Step-By-Step

Before tackling any project, you should examine what it entails. That includes both the work involved and the prices. With that in mind, here are some of the most crucial steps when building a house and their average costs.

1. Plot Of Land

If you want to start your home on the right foot, you need to choose the land you build on carefully. You can’t decide based on looks or good views alone.

A plot of land may seem nice but could contain contaminants in the soil, come with high zoning costs or be prone to natural disasters. As a result, it’s vital to do your due diligence and check all factors. Failing to do so can add thousands to your building expenses.

Average Land Costs

In general, a plot of land may cost $3,000 – $150,000.

Lots tend to be finished in urban areas, meaning they hook into water lines, sewers and the electric grid. Comparatively, you’re more likely to find unfinished lots in rural areas, resulting in lower costs. The average per-acre cost of raw land in a rural area is only $3,800, according to the U.S. Department of Agriculture (USDA) Land Values 2022 summary.

Additionally, you will need to clear and prepare the land before building. The national average cost is around $1,300 – $5,800, but heavily forested areas can cost more.

2. Building Permits

Once you purchase your plot of land, your contractors and subcontractors can start preparing. They’ll need to contact your local municipal office to receive the necessary permits. Sometimes a contractor already has a relationship with your municipality which speeds up the process.

Building permits are official documents that authorize you to begin constructing the property. The requirements, building codes and associated fees vary depending on where you want to build, so it’s wise to check them beforehand. During the construction process, a representative from the local Department of Building and Zoning will inspect the project to ensure it’s up to code.

Average Building Permit Costs

Some of the permits you may need, and their average price range, include:

  • Building permit: $1,200 – $2,000
  • Basement permit: $50 – $2,000
  • Electrical permit: $10 – $500
  • HVAC permit: $250 – $400
  • Plumbing permit: $50 – $500

3. Contractor(s) And Labor

A crucial figure in your project is the general contractor. This individual oversees the entire construction process of your home from beginning to end. They take on important responsibilities, including obtaining cost estimates, vetting and hiring a team of subcontractors and ensuring deadlines are met.

A general contractor is technically different from a custom home builder. The latter specializes in custom homes and draws up blueprints – two features the general contractor doesn’t share.

Average Labor Costs

A general contractor charges around 10% – 20% of the construction’s total cost, sometimes called “cost plus.” Some contractors may agree to hourly rates as well.

After you have a contractor, you need subcontractors. Each one specializes in a certain type of installation or task, such as security system installation or carpeting. They charge a similar hourly rate to general contractors. For example, you could expect to pay the following professionals these average rates:

  • Draftspeople: $50 – $130 per hour
  • Interior designers: $50 – $200 per hour
  • Landscaping architects: $70 – $150 per hour
  • House framers: $7 – $16 per square foot
  • Electricians: $50 – $100 per hour
  • Plumbers: $45 – $200 per hour

4. Foundation

Breaking ground is the next step once you finish all the prep work. At this time, a crew comes in to dig out the space needed for the foundation of your home.

The foundation isn’t the same for every home. The company will pour concrete depending on the type of foundation you choose, including a slab, crawl space or basement. A slab is generally the cheapest and a full basement is usually the most expensive. A crawl space tends to sit in the middle, cost-wise. The size will also influence how much you end up spending.

Average Foundation Costs

Your preferences and budget will determine which one you choose. However, each one has its advantages and disadvantages. The cost for a foundation averages $5 – $37 per square foot. The typical project costs around $9,139, or between $4,028 – $14,454.

Here’s a cost breakdown by type based on averages:

  • Monolithic slab: $7,000 – $20,000
  • Stem wall: $8,000 – $24,000
  • Pier and beam with crawl space: $9,000 – $17,500
  • Cement or cinder block: $11,500 – $19,000
  • Basement foundation: $24,000 – $44,500

5. Framing

The frame acts as the bones of your home. It supports all the finished features, including your windows, roof, doors, walls, and even garage (if you want one). The overall cost to frame a house includes both labor and materials.

So, you will need to factor in how long it will take to complete this stage of construction, along with the amount of material needed. As a result, a bigger or more complex home will likely cost more.

Average Framing Costs

Usually, you can depend on the framing to cost $20,000 – $50,000.

6. Exterior Finishes

Once you finish the basic components of the interior fixtures and drywall, you start on the exterior. That involves installing features such as doors, roofing, walls and windows. This may also be the step where the builders work on walkways, driveways and patios. However, some crews prefer to wait until the very end of construction to pour the driveway.

Average Exterior Finishing Costs

Exterior work helps complete the look of your property and generally costs $40,000 – $60,000. Multiple openings and your chosen finish affect this price, though.

7. HVAC And Other Major Systems

Electrical, HVAC and plumbing account for most of your system costs. That’s because installing these systems is usually labor-intensive. But you can’t skimp in this area since these major systems are critical to the health and safety of the home’s occupants. They also impact the efficiency of your property, meaning cutting corners will cost you in the long run.

Average Home System Costs

System installation costs around $30,000 – $75,000 overall, but the type and size of the systems may change that. You could expect to see a cost breakdown similar to this:

  • Plumbing: $7,500 – $15,000
  • Electrical wiring: $20,000 – $30,000
  • HVAC system: $1,500 – $13,000

8. Interior Finishes

While you might be tempted to cut costs when it comes to finishing the interior of your home, you don’t want to make decisions in this area based on utility. Instead, you want your dream home to accurately reflect your style and unique tastes. As a result, any special touches or customizations will result in higher costs. However, you may be able to reduce some costs if you DIY any features.

Average Interior Finishing Costs

You can estimate interior finishes will cost $50,000 – $100,000, but that’s only based on averages. Interior home finishing can run much higher than that because it’s based on personal preference. For example, if you choose luxury upgrades, such as marble countertops, hardwood floors or smart appliances, your total house cost could be higher than average.


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