How Much Does It Cost To Build a House?

If you learn how to estimate the cost to build a new home you will also learn how much the Builder’s or General Contractor’s profit is.

Why would you want to know how much it costs to build a house or how much profit a builder makes?

Why wouldn’t you? Knowledge (information) is power.

When you know the cost of building a home before you even decide whether to build or not, you are in a better position to decide what size, style, and quality of home you can afford, based on your budget of course, and you are also in a better position to later bargain with a builder.

Before you spend money on home plans for a house you can’t afford, I’ll show you how you can determine what you can afford.

The basic cost to build a house is determined by the size (square footage of living area), design (shape), and the quality & quantity of the materials (and the builder’s profit & overhead)

Here’s a recent letter I received that typifies the dilemma that most people face when trying to decide what to do when it comes to building a new home.

NOTE: This analysis of the cost to build a house will not include the land, any land development cost, or any financing costs.

From: David  North Carolina

Carl, We are in the process of designing our house and I’m trying to get a cost estimate of what this house will cost us before we go get plans drawn of a house that we can’t afford.  We basically have designed a 40 X 50 rectangle shaped house around 2040 sq. ft. living area with brick veneer, and with vinyl eves.

It will be a 1 story home with a huge unfinished bonus area in the attic to use as storage. It will have an attached 2 car garage with an 8ft. concrete wrap-a-round porch on the sides and the front.

Any information on how much does it cost to build a house of this type would be greatly appreciated.

Hi David,

You are wise in trying to determine affordability before spending money on home plans.

I learned that the hard way on my very first house when I had to “toss” the plans I had already purchased and go back and start “at the beginning”, right where you are. But I didn’t have available the “tool” you have.

The cost to build a house is determined by the size (square footage of living area), design (shape, etc.), the quality & quantity of the materials used and the builder’s profit.

Using this excellent tool called the “Building Cost Calculator”, from Craftsman Books, leading experts in construction cost estimating, you can solve your dilemma.

Let me walk you through the cost estimating process using this tool. It is not only an easy and fast process, it is fun.

Image courtesy of

The first question you will be asked is “How many corners does this home have?

The more complex the shape of the house is, the more expensive it is to build per square foot of floor area.

The second question you will be asked is “What is the total living area of this house?”

Larger new houses cost more to build than smaller houses but larger homes generally cost less per square foot than smaller homes.

Ranch style (single story) homes cost more per square foot than 2 story homes of the same size and quality.

The third question you will be asked is “What is the quality class of this home?”

New homes vary widely in quality and the quality of construction is a major cost variable.

For the purpose of a preliminary cost to build a house, to see what shape, size, and quality you can afford, I recommend choosing the “Quality Class 6” all the way through, for all choices.

If it turns out you can afford a certain style and size, you can always upgrade your choices!

Now you’ll answer just a few more quick questions and then you’re done.

Is there an attic, balcony, basement, garage or exterior porch?

Is this home in a housing tract?

Is this home built outside the metropolitan area?

What heating and cooling does this house have?

How many fireplaces in this house? And, is it a one story home or multi-story?

What State and Zip code?

You now have a rough estimate of the cost to build a new house based on your input.

Is the cost to build estimate on target? GREAT! If not, start over. It’s FREE and it’s FUN!

Well David, Using Raleigh, NC as the city, I came up with an approximate estimated cost to build of $242,122, for a 2,040 sq. ft. 1 level home with a 40 foot wrap around porch, central heat & air conditioning, one fireplace, 1,500 sq. ft of unfinished attic space, excluding land, land development costs, local impact fees, if any, and any other local fees , but including the Builder’s or General Contractor’s Markup of $27,642.

Good luck, Carl Heldmann, 2018

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