Cost to Build a House

Cost to Build a House

The most frequently asked question and the most “searched for” category on my web site, http://www.byoh.com/ is “what does it cost to build a house?”

If I told you that the national average cost to build a house for labor and materials was $65.57 per sq. ft. in 2007 & 2008 (2009 will probably prove lower), does that encourage you to build your own?

I certainly hope so. (Of course land is not included in the $65.57) Source: NAHB Economics Group. Construction Cost survey 2007. NAHB = National Association of Home Builders.

Keep in mind that $65.57 is an "average" cost. It includes "Tract" homes at $50.00 per sq. ft. as well as "Custom Homes" at $200 per sq. ft.

Note: I go into detail on "Cost Estimating" on several pages on this web site, as 30 plus years in the home building business has taught me that nothing about home building is as important as knowing how to estimate the "cost to build a house.

A very quick & easy method to check out the cost of different styled and different sized homes in different locales (city & state) is to find a new home being built by a professional builder that is for sale and that is similar in size and style (and quality) to your ideas for your dream house and do the following: 

Take the sales price of that builder's house and deduct the land cost, real estate commissions, and 25 percent builder profit and overhead and you'll have the real "cost to build” for that particular house.

Note: Different styles, different sizes, and different locales will give different results. Review some of my examples in "Cost to Build by State".

The land cost may be a bit tricky to determine, but there may be a similar lot in the neighborhood, a real estate agent can find out for you, or you could even call the builder.

You could even check property tax records as all homes, even used homes, have the site value broken out separately on tax records.

Now you simply divide the "cost to build" by the square footage of the heated area of the house and you'll have the cost per square foot.

To obtain the square footage of that particular house, check the sales literature, Realtor information, Tax records, or, call the builder.

Note: When you start your planning and start calculating your home building budget, remember that if you are successful in keeping your land costs at 25 percent of your budget, you will have 75 percent of your budget left for the cost of building the house.

Take that “75% number”, divide by the "cost to build per sq ft" for your locale and you will now know what size square foot house you can afford.

Now you can start looking at house plans by square footage, and of course by style or design.

You can do it!

I can help.

Carl