Estimating the cost of building a new home can be very daunting. It involves much more than simply the cost of the land and the labor. There are many different variables that affect the pricing for a new build.
National average cost
According to a 2019 Home Advisor study, the average cost for a 2,000 square foot home is just around $300,000. This equates to $150 per square foot, excluding the cost of land.
The national range for new construction varies from $150,000 to $440,000, which equals $75 to $220 per square foot.
And then there are individual average costs:
- Foundation work: $4,000 to $12,000
- Framing work: $1,500 to $6,500
- Exterior finishing: $40,000 to $60,000
- Mechanical systems: $30,000 to $50,000
- Interior finishing: up to $85,000
Variables affecting cost
Custom home: A home that is made to tailor to the homeowner’s specific requirements tends to run a heavier bill versus building a home according to stock specifications.
Design professionals: If you hire a professional architect to help with your home, you can expect to see a 5 to 15 percent increase in overall cost.
Modular or prefabricated home: These are homes that are built offsite and then assembled on location. A home such as this can cut the cost between 10 and 20 percent versus a custom-built home.
Housing development: Custom building a home in a development rather than an isolated location can cut costs up to 15 percent.
Excavation: If the land you are building on was not already excavated, this could easily add $10,000 to your construction costs.
Materials: This is where you can really manage the cost of a new build. Certain building materials vary widely in range. Appliances, fixtures, hardware, flooring, counter tops, and cabinetry are where you can make or break the bank.
Managing construction costs
The easiest way to get an idea of the construction costs you will be dealing with is to meet with several different builders and decide where you will get the best bang for your buck. Have them provide you their per square footage costs and a list of the materials they will use to build your home.
It is also recommended to pay attention to the costs of other newly constructed homes in your area that compare in size and style to what you are seeking. Take the price of the home, deduct the price of the land, and divide that amount by the square footage of the home to determine per-square-foot costs.
Be mindful when making changes during the construction process, you could easily overrun your budget. Unless those changes include switching to a more affordable building material, you will want to revisit your allowance before making a rash decision.