The Real Price Tag of Building a Home in Today’s Market

It’s widely acknowledged that housing isn’t particularly inexpensive. For numerous individuals, choosing to construct a new house ranks among the biggest monetary choices they will ever face. Starting from scratch allows for complete personalization according to individual preferences, yet this level of customization doesn't come without substantial cost implications.

The National Association of Home Builders has published findings from a survey involving 4,000 homebuilders, detailing the specific expenses for every phase of building a new home in 2024. According to their data, construction costs constituted approximately 64% of the total cost of a newly constructed home, which averaged at around $428,215 per unit. This means that the remaining portion of the purchase price includes various additional expenditures such as operational costs, general expenses, funding charges, promotional fees, and agent commissions.

So, what does the $428,215 actually cover? In this section, we will dissect the typical costs associated with constructing a home by breaking down each element. We'll explore the key phases involved in new construction and understand how these various components add up to form the total expense of building a house.

Site Work

Before a house exists, there must first be a plot of land. In 2024, work on these sites accounted for an average contribution. $32,719 The expense associated with constructing a new house includes various aspects involved in readying a location for residential development. This encompasses expenses related to engineering and architectural design along with acquiring necessary building permits. The preparation phase isn’t concluded once actual construction begins; additional inspections continue during this period. Nonetheless, preliminary groundwork constitutes only around 7.6 percent of total expenditures in the creation of a new home.

Foundation and Framing

The foundation and framing provide the structure and base for your home, ensuring these elements are executed flawlessly is crucial. According to the NAHB, the typical cost for framing a house averages out to be around $70,982 In 2024, foundations were more affordable, typically costing an average of $44,748 According to the new house data, combining the costs for laying the foundation and constructing the framework accounted for more than 25% of the overall expense in building a new home.

Major System Rough-Ins

Certainly, a house goes beyond merely being a concrete base with a wooden structure. In today’s homes, three primary systems are essential: plumbing, electrical, and HVAC. These components each have similar costs in 2024, typically amounting to roughly the same figure on average. $27,ooo . Altogether, the upfront expenses for setting up these systems were $82,319 —and that doesn’t include any appliances or fixtures.

Interior and Exterior Finishes

So, you have a house complete with a foundation, structure, and all essential systems... now you simply need to finalize everything. Completing the exterior turned out to be one of the more budget-friendly phases of building a new home in 2024, typically costing an average of $57,510 For projects involving external wall surfaces as well as the fitting of windows and doors.

The interior finishes turned out to be the priciest segment in the study. This is logical since numerous elements of building construction are classified under "interior finishes." Items such as insulation, drywall, paint, cabinetry, appliances, and others collectively contributed to an average expense. $103,391. That amounts to roughly a quarter of the total expense for constructing a new house, with this sum being allocated entirely to one phase of the build process. The cabinets represented the priciest component of the internal finishing touches, costing around $20,000 per new home.

Last Stages of Construction and "Additional" Costs

Following all those stages, we reach the last phases of building. This phase is essentially about adding the finishing details which include tasks such as laying down the driveway, constructing porches and patios, along with overall clean-up at the location. Fortunately, this part turned out to be the most budget-friendly segment on average, amounting to $27,710 For the new homes, the NAHB additionally added a concluding "Other" classification in the survey that encompassed various additional items. $8,835 In expenses that couldn't be directly linked to the other categories.

Total Sales Price Breakdown

So that’s where the $428,215 In new home constructions, the costs originate primarily from those aspects. However, this typically accounts for roughly two-thirds of the overall sale price. When additional factors such as financing, marketing, and an 11% profit margin for the constructing company are included, the typical full sale price of a newly built house in 2024 amounted to $665,298 If you're considering constructing a house from scratch, ensure you account for all the expenses involved before embarking on your quest to build your ideal home.

Source:

NAHB, “ Expense of Building a House - 2024 ” (2024)