How Much Does It Cost to Build a House in the U.S.?

By: Dave Roos  | 
unfinished house
The cost of building a house depends greatly on where you're building, the size of the house and the types of interior finishes you add. Peter Cade/Getty Images

There are plenty of good reasons why you might want to build your own home. Maybe you already own a nice piece of land. Maybe there aren't a lot of affordable, high-quality homes in your area. Maybe you want to build an investment property to rent or flip for a profit.

So how much does it cost to build a home from scratch? That's the million-dollar question (in some housing markets, it's literally a $1 million question). The truth is that home-building costs are going to vary greatly based on three factors:


  • Size of the home. A 5,000 square-foot (464 square-meter) home is going to cost considerably more than a 2,000 square-foot (186 square-meter) home.
  • Quality of finishes and amenities. Do you want expensive marble countertops in the kitchen and bathrooms or can you live with inexpensive laminate? Luxury upgrades add up fast.
  • Geographic location. Like home prices, construction costs vary significantly by region. Expect to pay more in the Northeast and West than in the South.

Cost Comparison: Building a Home vs. Buying

According to May 2023 data from the U.S. Census Bureau, the average sales price of a new single-family home was $487,300, up from $464,200 in 2021 (median sales price was $416,300). The average home-building cost was $392,241, or $153 per square foot, according to the National Association of Home Builders. On the surface, that's a price difference of over $95,000.

But it's important to note that those numbers aren't an apples-to-apples comparison. The average sales price of $487,300 was what homebuyers paid for both the house and the land it's sitting on. The $392,241 average cost of building a home was only the "contract price" charged by the contractor to build the home. The cost of the land, if needed, was separate.


What does that mean? It means that if you already own land, then it's most likely cheaper to build your own place. But if you don't own land, you might not save anything compared to buying a newly built home. When the National Association of Home Builders (NAHB) surveyed its membership in 2022 (the most recent time this survey was done), it found that the average lot cost nearly $114,622 for an average lot size of 17,218 square feet or 1,580 square meters, the smallest square footage since 2011. This is a big increase in cost and decrease in size from 2020, when the average lot cost was $90,00 for an average 22,000 square-foot (2,044 square-meter) lot.

It's also important to note that the Census Bureau figures included sales of existing homes. The NAHB put the sales price of a newly built single-family home at $644,750, including the cost to build the home, lot cost, marketing cost, sales commission and profit.

Keep in mind that the costs listed in this article are for a contractor-built home. In other words, we're assuming that you are hiring a general contractor to build the home. General contractors add 20 to 30 percent to the total cost of building a home because that's how they're compensated for hiring and managing all of the subcontractors.

Twenty to 30 percent is a lot of money! You may be tempted to act as your own general contractor and potentially save tens of thousands of dollars, but it might not be worth it. First of all, it's a huge time commitment to act as your own contractor, and if you're new to construction, you're likely to make a few big and expensive mistakes. Not to mention, some subcontractors will charge you more than they would a professional contractor, so those 20 to 30 percent savings may get eaten up by higher materials and labor costs. Contractors will also know which building permits you need and when to apply for them.


Big-Picture Cost Breakdown

According to the NAHB survey in 2022, the total construction cost for a 2,561 square-foot (238 square-meter) home was $392,241 on average. That's the highest in the history of the NAHB conducting this survey.

Again, we should note that these average costs do not include purchasing the land or lot, and that the numbers below fluctuate significantly by geographic region.


That said, here's how the NAHB breaks down the cost of building a 2,561 square-foot home by each stage of the construction process. (This square footage is the average size of a single-family home in the U.S., according to the NAHB):,

Average Lot Size: 17,218
Average Finished Area: 2,561

I. Sale Price Breakdown


Share of Price

A. Finished Lot Cost (including financing cost) $114,622 17.8%
B. Total Construction Cost $392,241 60.8%
C. Financing Cost $12,192 1.9%
D. Overhead and General Expenses $32,979 5.1%
E. Marketing Cost $4,268 0.7%
F. Sales Commission $23,080 3.6%
G. Profit $65,369 10.1%
Total Sales Price $644,750 100.0%

II. Construction Cost Breakdown


Share of Construction Cost

I. Site Work (sum of A to E) $29,193 7.4%
A. Building Permit Fees $8,292 2.1%
B. Impact Fee $5,208 1.3%
C. Water & Sewer Fees Inspections $5,800 1.5%
D. Architecture, Engineering $4,724 1.2%
E. Other $5,169 1.3%
II. Foundations (sum of F to G) $43,086 11.0%
F. Excavation, Foundation, Concrete, Retaining walls, and Backfill $39,731 10.1%
G. Other $3,355 0.9%
III. Framing (sum of H to L) $80,280 20.5%
H. Framing (including roof) $60,831 15.5%
I. Trusses (if not included above) $11,479 2.9%
J. Sheathing (if not included above) $5,383 1.4%
K. General Metal, Steel $1,168 0.3%
L. Other $1,419 0.4%
IV. Exterior Finishes (sum of M to P) $46,108 11.8%
M. Exterior Wall Finish $19,746 5.0%
N. Roofing $11,496 2.9%
O. Windows and Doors (including garage door) $13,158 3.4%
P. Other $1,709 0.4%
V. Major Systems Rough-ins (sum of Q to T) $70,149 17.9%
Q. Plumbing (except fixtures) $22,706 5.8%
R. Electrical (except fixtures) $23,892 6.1%
S. HVAC $21,845 5.6%
T. Other $1,707 0.4%
VI. Interior Finishes (sum of U to AE) $94,300 24.0%
U. Insulation $6,530 1.7%
V. Drywall $13,184 3.4%
W. Interior Trims, Doors and Mirrors $12,727 3.2%
X. Painting $8,793 2.2%
Y. Lighting $4,502 1.1%
Z. Cabinets, Countertops $17,775 4.5%
AA. Appliances $6,263 1.6%
AB. Flooring $13,019 3.3%
AC. Plumbing Fixtures $5,166 1.3%
AD. Fireplace $1,608 0.4%
AE. Other $4,733 1.2%
VII. Final Steps (sum of AF to AJ) $23,065 5.9%
AF. Landscaping $9,123 2.3%
AG. Outdoor Structures (deck, patio, porches) $2,178 0.6%
AH. Driveway $8,775 2.2%
AI. Cleanup $2,280 0.6%
AJ. Other $709 0.2%
VIII. Other $6,059 1.5%
Total $392,241 100.0%

Source: National Association of Home Builders, Cost of Constructing a Home - 2022, released Feb. 1, 2023


Where the Building Costs Are

As you see above, the most expensive single category in the home-building process is "interior finishes," which encompasses every door, lighting fixture, toilet, countertop and dishwasher in the house. This category is so expensive because it includes so many different components, each potentially having a substantial cost, said Paul Emrath, vice president of surveys and housing research for the NAHB, whom we spoke with in 2021.

"There are certainly ways to economize and spend less than the average home builder," said Emrath. "Choose a less expensive countertop material, spend less on interior trims or maybe forgo a fireplace."


In the end, it comes down to your personal preferences and your budget. You can easily spend more or less than the national average on interior finishes but beware of "upgrade creep." Every time you say yes to a contractor's suggestion for a slightly more expensive appliance or plumbing fixture, it's going to add up.

Two other standout categories for price increases were "framing" and "foundation, concrete, retaining walls and backfill ." "Lumber and ready-mix concrete prices were extremely volatile and experienced high peaks in 2022, which can help to explain these subcomponent increases from the previous year's survey," said a 2023 NAHB press release.


Do Construction Prices Change From Year to Year?

That's a good question and the not-so-helpful answer is: sometimes. It is very difficult for even the experts to predict what building material or construction component will increase in price in the near future. For example, no one saw the COVID-19 pandemic coming or the ensuing shortage (and skyrocketing cost) of key materials like lumber.

While global pandemics are thankfully rare, price fluctuations are not, said Emrath. "Some materials ship internationally, like concrete," he said. "A few years ago, we saw a shortage of concrete when the Chinese economy surged and they were simply consuming a lot of the international shipping capabilities."