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Building a Home

How to Determine Cost to Build a House

Published on:

7/01/20

written by:

Carrie Barker

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A blog reader recently asked me, is there a way to find out what the average construction cost per sq ft would be?” I’ll share my answer below about how to determine the cost to build a house. But first, let me tell you that there are MANY variables that come into play when it comes to home build costs.

I can give you general estimates and other indicators, but there is only ONE way to get accurate (i.e. exact or specific to your situation) information.

WHAT IS THE AVERAGE COST TO BUILD A HOUSE?

This question is virtually impossible to answer.

There are websites out there that offer averages for how much it costs to build a house … there are means and medians and all those stats we learned in school.

However, construction costs vary WIDELY between geographical locations … and even among builders within the same locale.

The single largest variable that affects the cost to build your home is your LOCATION.

Building a home in the mountains of California is VERY different than building a home where I live in the flat Midwest.

Obviously the real estate costs are different, but also the engineering expertise levels and the special equipment needed to build a home on a mountainside are different than building on a flat lot in Illinois.

Other significant variables that affect cost are:

HOW TO DETERMINE COST TO BUILD A HOUSE

If all you want to know is the ‘average’ or the median to build a home in America, then just do a simple Google search. You’ll find a ton of (varying) information that is impossible to apply to YOUR personal situation.

On the other hand, if you want to know how much it costs to build a house in YOUR locale, my recommendation is that you start having conversations with local builders so that you get an idea of how much you can expect for construction costs (excluding your lot).

I encourage you to talk to several builders (not just one) to see if the cost estimates are similar.

If you want to build a custom home, talk to builders who build custom homes.

If you want to build a production home, talk to builders who build production homes.

Compare pricing among the same types of builders (i.e. production vs custom builders).

If one builder is much lower in ‘price’ than the others, you might want to steer clear of him or her. This could be a red flag that this builder might be providing inaccurate information in order to secure your business.

Believe me, this will come back to bite you later in severe budget overages. It’s best to get a REALISTIC idea of the cost before you ever start building.

Like I said above, there are MANY variables that come into play when it comes to home build costs. However, there is only ONE way to accurately determine the cost to build a house in your location … talk to local builders!

If you enjoy learning home build prep tips like this, make sure to download my FREE ‘Custom Home Build Prep Guide’ below!

  1. That makes sense that the upgrades to your house would cost a lot more. I could see how that would make it important to pick and choose which upgrades you need. I’ll have to recommend that so my friend that wants to build a house so he can budget out his upgrades.

  2. Dave says:

    When planning a custom or even a semi-custom home, you’ll work closely with your custom home builder to choose features and materials that will fit within your specific budget. An experienced custom home builder will be able to find ways to bring your costs down to your budget without expecting you to make any major sacrifices.

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