The Most Expensive Part of Building a House

It's every person's dream to live in a home that fits their particular way of life and family. So it’s no surprise that many people take on the epic project of building their own homes. When you decide to construct your own house, several factors can wildly affect the final price tag.

Often People Ask What's The Most Expensive Part of Building a home?

Construction accounts for the largest expense when building a home, eating up more than 60% of the overall costs. While a finished lot cost accounts for 19% of the overall expense.

Home Construction Costs 61%
Land Cost 19%
Builder Profit 9%
Other 11%
Percentage Cost breakdown, Single Family Home

The largest component within construction expenditures is interior finishing, which accounts for 25% of the overall price tag. Framing is the second most costly element, accounting for 17%

The cost breakdowns for these items range significantly depending on what type of house you want to build and where you live. In this blog post, we will discuss the most expensive parts of building a home as well as some other aspects that can increase or decrease the price tag! We will also go through the most cost-effective houses to construct.

What's the most expensive part of building a house? Construction cost break down of building a house

Here is the cost breakdown for an average home - but bear in mind the percentages depend on the lot price, which can drastically change depending on the area.

Expenses as a percentage of the total cost of construction:

Interior finishes: 25.4%
Framing: 17.4%
Major system rough-ins: 14.7%
Exterior finishes: 14.1%
Foundations: 11.8%
Final steps: 6.8%
Site work: 6.2%
Other: 3.8%
Percentage Break Down of Home Constructions Costs

How does the lot price factor into the overall costs? 

Depending on where you reside and how sought-after your area is, the cost to construct your home can differ. There's no way around it, in some cases the most expensive part of building a house is the actual land itself!

Take, for example, if you live in California vs Illinois. A lot in California would be significantly higher than somewhere like Illinois and could even amount to more than the cost of constructing the home.

In many other cases, though, the lot will be a small part of the expense - especially when it comes to homes in more remote areas where there is much less demand. Percentages might also vary depending on the cost of labor in your specific market. Fast forward to the next section for a cost breakdown of home builders across the country, showing the average construction cost to build a home.


The average cost to build a home

The average cost to build a 2,600 square foot home in the United States is $423,800. This ranges between $240,000 - $710,000, depending on location and construction materials. This cost can vary greatly within the United States.

Region Average Cost per Square Foot:

Northwest $180
West $165
Midwest $140
South $130
Regions Average Cost Per Sqft.

The difference in prices isn’t always down to the most expensive elements. Some of the items that account for the difference in cost are location, labor costs, and materials. Homestyle, square feet, beds, baths, and enhancements will all add or lower your overall construction costs too.

Cheapest homes to build

The least expensive home to build is a modular home, coming in at an average cost of $140 a square foot. A custom build can be as little as $250 a square foot.

A pole barn home is the cheapest home design to build currently. This term, while not new, is no longer a snoozer. These low-cost houses have recently been dubbed 'barndominiums' after a recent trend that has dubbed these modest properties. Check out the hashtag for some impressive displays of banominiums going up all across the country. You can build a pole Barn House for anywhere between $7,000 - $35,000.

Barndominium

Another popular approach is the tiny house and minimalist movement, which has seen great success on Youtube channels like Never Too Small. While the cost of building these homes is significantly less than an average-sized home, they can prove to be expensive in other ways. Tiny homes come in second as the cheapest home to build in America today, from anywhere between $40,000 - $80,000.

Out of the traditional home designs, the 'Villa' is the cheapest home at $110K - $150K square foot, while the ranch style home is the most expensive home to construct at $196K - $625K per square foot.

Conclusion

We hope this article was a good introduction to the expenses associated with constructing a house.

To recap; the most expensive part of building a house is the cost to construct, which can vary depending on location, amenities, and home style.

The least expensive homes are modular homes due to savings in labor costs over other types of construction methods.

Other factors that will increase or decrease your price include delivery service fees if needed, site work upgrades/additions, enhancements.

If you have any questions please feel free to contact us. We are real estate agents that can provide you with locating your next home builder and finding your dream home. You can find Naperville's best home builders here..

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Posted by Rafael Velasco on
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