How Much Does It Cost Per Square Foot to Build a House?

A map of the United States, with regions in different colors, shows how much it costs per square foot to build a house in various parts of the country.

The cost per square foot varies across the country. The price per square foot to build a house depends on a variety of factors, including the cost of materials and labor.

The latest Construction Cost survey by the National Association of Home Builders (NAHB), conducted in September 2017, found that the average cost per square foot to build a home came out to $85.65.

The survey found that on average 55.6 percent of the final sales price of a new home goes to construction costs, 21.5 percent to finished lot expenses and 22.9 percent to financing and business costs. In this survey, construction cost totaled $237,760 for an average 2,776 sq. ft. home.

The design of a home, such as its size and shape, obviously influences construction costs, according to Ed Hudson, director of Market Research for the Home Innovation Research Labs, an NAHB subsidiary. Larger homes with a basement, more floors, more corners, unusual shapes and more complex rooflines naturally cost more per square foot than an average home.

“However,” notes Hudson, “the cost per square foot for a new home is even more greatly impacted by the construction quality, grade of exterior materials and level of interior finishing of the home.”

This involves the quality of cabinetry, countertop material, appliances, plumbing fixtures and finishes, lighting, flooring, and HVAC systems, as well as the level of molding and trim, the grade of siding and roofing products, the number and efficiency of the windows and doors and the extent of energy efficient systems and home automation features included. These “finishes” could easily add anywhere from $30 per square foot to $80-plus per square foot to construction costs.

For potential buyers, Raymond Pruban, chief manager of Amaris Custom Homes in Maplewood, Minn., offers this analogy: “When people ask how much per square foot, I ask what do you want: a Mercedes or a Chevette? Both are cars, both have steering wheels and both have four tires, but one may be $4,000 per tire and the other $25,000 per tire.”

When comparing square foot costs of different homes and homes in different regions, you need to make sure you’re comparing apples to apples. — Ed HudsonRegional Variation in Construction Costs

New-home sales price and construction costs also, obviously, vary greatly across the country, adds Hudson. The latest Census Bureau Survey of the Median Price per Square Foot of new single-family homes shows sales prices per square foot ranging from $150 in New England and $138 in the Pacific region to $81 in the East South Central and $89 in the West South Central.

“The biggest cost variations from region to region have to do with the price of land, the cost of labor and the cost of materials,” says Hudson. “The most volatile ingredient is the cost of land. Building in seismic and high winds areas will add to the cost of construction. As can requirements to build taller homes or homes with breakaway lower level walls in flood plain areas. Local impact fees and permitting fees vary substantially.”

Pruban agrees. Variations in local land use, regulations and labor conditions dramatically affect regional home construction costs.

In Maplewood, Minn., “the Metropolitan Council, using local city comprehensive plans, directs development,” Pruban says. “This can have the effect of driving up land prices because, as soon as an area of use is opened, developers usually scramble to it and bid up the price.

Material Costs Drive the Price of New Homes

The cost of materials also varies significantly from region to region.

“Lumber will be a bit lower in lumber-producing areas. Local building practices make some lower cost materials accepted and some not. Asphalt roofing, for example, is common in many areas of the country. In other areas, the standard is concrete roofing tiles, which are more expensive,” Hudson says. “Several major building materials — such as steel, cement and lumber — are subject to commodity pricing, which can fluctuate with world-wide demand.”

Even the cost of shipping and warehousing materials, he adds, varies depending on the geographic area, being more expensive in more densely populated areas than in less densely populated areas.

Finally, when comparing square foot costs of different homes and homes in different regions, you need to make sure you’re comparing apples to apples, says Hudson.

Examine how builders count finished and unfinished basement space, garages and covered decks. Different markets may use different systems. “In our area, it’s common to calculate the cost of above-grade living space and then add accepted costs-per-square-foot for a garage, porch, or unfinished space,” says Hudson.

A map of the United States, with regions in different colors, shows how much it costs per square foot to build a house in various parts of the country.

Roy Diez is a freelance writer and marketing professional specializing in the architectural, building and construction industry. He is a former editor-in-chief of Professional Builder magazine.

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