There are so many different variables that determine how much a new home costs that there is no single definitive average that can be easily cited. Almost everybody contextualizes their cost information for a specific type or cohort of home buyers. From custom home build to residential tract development to prefabricated homes, the average cost to build a home can vary by a few hundred thousand dollars or more.
If you have a finished lot available, if you’re planning on building in an easily accessible area for crews and equipment, if you’re building in an area with affordable home values, if you need only and if you’re willing to choose budget-minded furnishings, then a new home build might be very reasonably priced, even less than $100,000. If you’ve reached a place in your life and career where sticking to a tight budget is less of an issue, if you’re excited about building a custom luxury home with more than a few bells and whistles, if you’re planning on hiring an architect, if you’re planning on in the middle of a trendy neighborhood or out in the middle of nowhere, then the expected cost could be several hundred thousand or even several million dollars.
Here is what the home building industry says about average costs.
If there were a definitive statistic to cite, it would probably be $290,000. This is very close to the number suggested by HomeAdvisor, an online company that actively tracks the costs of actual home builds that go through their marketing network. Many online industry sources take their cues from HomeAdvisor, so you’ll find this $290K number pop up other places as well. I’ve seen sources that suggest the average home is 2,000 square feet with construction costs of $150 per square foot. If you’re looking for a breakdown of how this money is typically spent in an average new home build, The Lenders Network has reverse-engineered this figure into a fairly comprehensive analysis of home building component costs.
Looking for a different approach to cost estimates that’s better suited to custom home builds? There’s a good chance, for example, that your dream home is bigger and swankier that these average figures. In fact, the average size of a new home is now around 2,600 square feet, to say nothing of custom home builds. CostHelper suggests that the average custom home is more like 3,600 square feet with upscale construction costs between $200-$400 square feet. This makes the average cost of a custom home somewhere between $700K-$1.4M.
Maybe you’re not trying to settle on a number just yet, but would prefer to learn more about the step-by-step process of creating a budget and cost estimate for your custom home build. I encourage you to peruse the tips and advice on this website and start reaching out to architects and builders in your area.