How Much Does It Cost To Build A House? BYHYU 107

​I’ve hesitated to do an post/podcast on the cost of construction because homebuilding costs can vary greatly from house to house and region to region.  But, “How much does it cost to build a house?” is a question that comes up a lot.  So I decided to give you some information collected from the National Association of Home Builders.  They did a cost of construction survey which asked builders from around the United States to break down their construction costs for the typical home they built in 2017.




This week we'll cover a lot of numbers that you can't possibly remember, but I want to give some points of reference for our own project.  




I’ll not only share the average cost for each major category of the building process, such as site work, framing and the foundation, but I’ll also tell you what percentage of the total cost of construction each segment represents.  

Remember, all the averages that you’ll hear are based on the 2017 NAHB Construction Cost Survey.  Other sources may have different numbers.  But let’s get right into it.



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The average single-family home built in 2017 was 2,776 square feet, so almost 2800 square feet.  That accounts only for finished floor space, not garages and outdoor spaces.



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The average lot size was about 11,186 square feet.  That’s about a quarter acre. One acre is equivalent to 43,560 square feet.  That average lot size of 11,186 square foot was the smallest lot size in the survey’s history.   Lot sizes, in general, are getting smaller as less and less land is available.




The average construction cost for a typical single-family home in the 2017 was $237,760.   Now, that is simply the cost of the construction process and does not include the builder’s profit, marketing costs, overhead, financing and other expenses that go into the sales price of the house. 





The average sales price charged by a builder in 2017 for a new home was $427,892.  That means that although builders charged on average almost  $428,000 for a new house, that house cost them only $237,760 to build.
 

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The average dollar amounts needed for construction will vary greatly.  But what should be a little more consistent from region to region and house to house are the percentages of the total cost of construction for each construction category.





Let’s start at the beginning: 



Construction Preparation and Site Work Costs 

In 2017, they averaged $15,903 and accounted for 6.7% of construction costs.  That amount  includes:

Building Permit Fees (which came to just over $4000)
Impact Fees
Water and Sewer Fees
Architecture and Engineering Services




Foundation  

The average foundation cost was $25,671, which was 10.8% of the cost of construction.  Foundation costs include:

Excavation
Concrete
Retaining walls
Backfill.




Framing  

Framing averaged $41,123, accounting for 17.3% of the construction budget.
Framing includes:

House and roof framing lumber
Roof trusses
Sheathing




Exterior Finishes 

Brick, vinyl, stucco or other house cladding
Roof shingles
Windows and doors

 Exterior Finishes cost $33,066.  That represents 13.9% of the construction costs




Plumbing, Electrical and HVAC rough-in 

This category came up to $32,746, or 13.8% of the construction budget. 
This amount includes:

Pipes and wiring, but not lighting fixtures or plumbing fixtures such as faucets   
Heating, Air conditioning and Ventilation systems
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Interior Finishes

Interior finishes took the lion’s share of the budget, costing on average $67,939, which was 28.6% of construction costs.  But this category includes a lot of line items, including:

Insulation
Drywall
Interior Trim, Interior Doors, and Mirrors
Painting
Lighting Fixtures
Cabinets and Countertops
Appliances
Flooring
Plumbing Fixtures
Fireplaces




A surprising thing for me from this category was that drywall cost more than $10K. 
I thought that cost would be less. And appliances averaged just over $3500. I thought that number would be higher.   Take a look at Table 1 from the Construction Survey for more detail.


  


Final Steps of Construction

The final step had an average cost of $16,591 for 7% of the construction budget.
These final steps include:

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Landscaping
Outdoor Structures such as decks, patios, porches
Driveways
Clean Up 


The highest line item in this category is landscaping, averaging $5859.

Miscellaneous/other

This category which accounted for $4722 or 2% of the budget.





So in summary, in 2017, according to the National Association of Home Builders, the average construction cost of a builders’ typical single-family home was $237,760 and it was built on a quarter of an acre. Of the 8 major stages of construction, interior finishes, at 28.6%, accounted for the largest share of construction costs, followed by framing at 17.3%, and exterior finishes at 13.9%.  Plumbing, electrical and HVAC rough-ins accounted for 13.8% of the budget, foundations were 10.8%, and final steps, including landscaping, driveways, porches and cleanup  were 7.0% of construction costs.The smallest shares of construction costs were site work and construction preparation at 6.7%, and miscellaneous costs which were 2% of the costs.  






These are the averages for builders.  If you act as owner builder, you’ll likely to pay a little more since you won’t get volume discounts for labor and materials. 




And If you’re building a high performance house, your HVAC system, windows and insulation will probably cost more than average.  And larger, more complex and more luxurious houses or houses in expensive markets like California will also obviously cost more too.   But this information, particularly the percentages or share of the construction costs, will give you a ballpark idea of what you might be spending on your new house.




Take a look at the survey which which will give you even more detail.




I hope that information gives you a bit of perspective.  Thanks for stopping by.