2.21.23

How Much Does It Cost to Build a House?

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An exterior photo of a house under construction.
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A quick overview of factors that determine the final cost of a newly constructed home.

Building a house is exciting, but it’s also a huge investment. At a minimum, building a home costs $150/square foot. However, if you want more than builder-grade finishes, expect to pay more, potentially anywhere from $300 to $700 per square foot. Here’s a quick overview of the factors that determine the final cost for a newly constructed home.

Factors influencing the cost of building a house

Location, home size and finish choices account for the wide price range in building costs. In Michigan, Homelight reports that the average cost for a home with finishes like granite countertops, hardwood floors, and other basic upgrades is $250 per square foot. For an 1,800-square-foot home, this results in cost around $450,000.

Every choice will affect the final price of a newly constructed home and these are items with the greatest price ranges:

  • Land: If you buy highly desirable land, such as lakefront property, your land costs can be much greater than the average cost per acre of $5,850.
  • Foundation: Choosing a basement over a slab roughly triples the foundation cost.
  • Framing: Costs will vary based on both the home’s size and the complexity of the design.
  • Roofing and siding: these are two more elements that bring wide price variations. Asphalt shingles and basic vinyl siding will cost much less than tile roofing and stucco.
  • Finishes: Selection of finishes for cabinets, flooring, trim and carpet also makes a significant difference in how much a newly built home costs.

New construction vs. pre-existing homes

In most cases, it costs more to build a home than to buy an existing one. Despite this, many folks find it preferable to build because they get to live in a brand new home that has been customized to their needs and preferences.

Financing new home construction

Building a new home includes two phases of financing. First, there’s a construction loan and then there’s a standard mortgage that’s put in place when the home has been completed. While some lenders charge closing fees for both financing phases, with Consumers home construction loans there’s no double-dipping; closing fees occur only once.

Consumers helps more than 2,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit; contact us online or call us at 800-991-2221.

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Consumers home loans

We’d love to help you with a mortgage or home equity line of credit.

Learn more

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