Let’s Figure Out the Price You Pay to Build Your House!

Building a new home can be your dream, but it’s costly. Hence, people do intense planning before doing anything. After all, they want to own it in every sense, just like you. As mentioned, building anything new comes at a high price. So, it can be good to calculate what you pay for this. It should be affordable for you. On average, one can construct a single-family home of 2,600-square-foot with a budget of slightly more than USD $485k. The cost can also exceed depending on when you build, where, and more. Materials, labor cost, and size can also be significant considerations. Although it’s tricky to come up with specific estimates because of multiple variables, you can explore a few critical factors for an idea.

Home size

You may have to spend USD $150 for every sq ft. So, a 1000 sq ft home can cost around USD $100k to 200K, while a 1500 sq ft home can demand a budget of USD $150k-300K. A 2000 to 3000 sq ft house can cost about USD $200k to 300k on the lower end and USD $400k to 600k on the upper side. Because of the expense, some people prefer tiny homes. But you can still make your dream home on an affordable budget if you approach it strategically. You must live with your family in a clean space. At the same time, you must refrain from burning your savings on something unnecessary.

Some regions cost more than others when it comes to building homes. For instance, places like Iowa, North Dakota, Nebraska, and Kansas can be cheaper than New York, North Carolina, Massachusetts, Hawaii, Rhode Island, etc. Hence, it would be best to account for this aspect too. That’s why it’s essential to understand the real estate trends, your needs, and your financial strengths.

Home building cost

When thinking about this, you should calculate general expenses like builder payments. Also, a finished land with utility connections like electricity, sewage, and water can cost around USD $90k on average. Undeveloped land can be cheaper but will eventually cost more as you build utilities. Then, there will be a cost to the site work or plan. It involves your draftsperson or architect. They help expand all the home details, such as layout, size, design, and electrical connections. Once the plan is ready, you will need to secure permits, which will be an additional cost.

Generally, building permits cost about USD $5k, and inspection services for sewer and water lines about USD $4k. At the same time, you pay the government an impact fee of USD $4k for public services. Next will be the foundation, which can take about USD $35k. The foundation job includes the use of concrete and lumber materials. If you add a basement, your budget will shoot up. Also, some homes require retaining walls to avoid structural risks from moving soil. So, it adds another item to your debit list.

According to experts, building house frames can be one of the most expensive after interiors and land. Frames give your home its shape. The skeleton, including the roof, needs plenty of lumber, which can cost nearly USD $41k or more. Add another USD $ 6k for the trusses. After this, you can calculate the cost of sheathing to safeguard trusses and frames. It can be around USD $3k. Using metal and steel materials can increase your expense by USD $2k more.

Interior and exterior finishes

Interior and exterior finishes

So, interiors are the other expensive part as it involves various elements. Features like countertops and cabinets can demand a budget of USD $14k, flooring around USD $ 2k, and drywall about USD $11k. Mirrors, trim, and doors can also cost nearly USD $11k. However, other things can be low-cost, such as painting (USD $8,000), appliances and insulation (USD $5,000 each), plumbing items including top-rated sink fixtures (USD $4k), etc. You can also add fireplace and lighting charges. Overall, these basic interior tasks can be achievable for USD $75k.

One of the costly items in the exterior can be the wall surrounding your house. Lots of materials go into it, charging about USD $19k on average. There will be a separate cost for the garage, doorways, and other openings. For the roof, you can count an extra USD $10k. Anyway, exteriors can be slightly cheaper, costing about USD $42k to get the main jobs done.

A few critical observations

These are only average figures, as many items still need to be included. Nevertheless, it can be an excellent time to ask if you can afford to build a house. It depends on your income and financial status. The financial experts say you can go ahead if the cost of your homeowner’s insurance, property taxes, and other fees is under 25% of your in-hand pay. If you have to pay more than 25% toward these,  it can be wise to wait for more time. Or, you should be ready for a hefty downpayment. Another thing is you should be debt-free and have enough savings for three to six months of survival before entertaining this thought. If you secure this area, you can carry the weight of expenses that come with homeownership.

If you want to check the possibility, chalk out your financial plan. See whether your monthly home cost is less than 25% against the take-home package. Go through the expenses to determine what you need to pay and where. Once you find the proper budget, follow it. Otherwise, you can overspend and regret your decision. Also, going with adequate planning can be safe. You will either compromise many things or borrow more money to meet your design and décor goals. All these can be a nightmare.

Owning a home can be the most significant decision in life. But hurried steps can ruin everything. Hence, think well and plan better. You want a home to make fond memories. Build an adequate budget or pick clever choices for a project like this. Take everything into your account before taking a big step. Look for the best mortgage plans and interest rates. Choose the proper contractors and vendors.