The true cost of building a new home can vary depending on how prepared you are before you start the process. If you want to be as cost effective as possible it is recommended you be your own general contractor. This will take some research and a lot of planning ahead of time. If you are unsure as to what a general contractor does and how you can be your own general contractor it is advised you read the free ebook by Carl Heldmann at This book teaches you how to be your own general contractor and save 25% on the total cost of building your new home.

Factors Affecting Cost

One of the costs incurred when building a home is the cost of the land you plan to put the home on. Regardless of where in the United States you are going to build, land costs vary greatly. The reason for the variances is location, location, location.

Other factors that affect the cost of building a new home are size of the home, quality of materials you are planning to use and custom features you are installing in the home. For example, if you are planning on building a 3000 square foot home with a bathroom attached to all four bedrooms as well as a community bathroom, you are going to spend more in materials because you have to buy more sinks, bath tubs or showers, toilets and all of the plumbing supplies that go along with the installation of these items in a bathroom. If you are building a simple one bathroom, two bedroom home you are going to spend much less in material costs.

The National Association of Realtors reports the median cost of building a new home in the United States is around $181,300. This figure can, and does, change with the size of the home, location of the home and whether the housing market is soft or not. Carl Heldmann estimates the cost of building a new home in the United States to range from $80 to $110 per square foot.

Geographical Considerations

As mentioned above, the cost of building a home will contain the cost of the land you are building the home on. If you are building your home in a subdivision you may spend less but may end up with less land. Building your new home on a flat, rock free lot will cost much less than building on a site that has hills and valleys, rocks and trees or other brush. Excavating is an additional charge in your home building budget.


There are many companies that build homes that are considered pre-fabricated. These homes tend to be erected rather quickly. There are some variances in options you can choose in the home but there are usually only a handful of styles to choose from. If any of these styles don’t match your idea of your new dream home and the company cannot meet your specifications you may need to contact a local builder who doesn’t build pre-fab homes.

Inflation is another concern. If you are taking the time to prepare and do research prior to building your home you are going to have to consider inflation costs into your total price. Currently the average inflation rate is 6% per year.

Seemingly small things such as the amount of windows you want and types of faucets you choose throughout the house will greatly affect the overall price. Square footage is another concern. Most builders actually charge more per square foot for smaller homes. The shape of a new home and things like the pitch of the roof will also dictate cost.

Average Costs for Different Size Homes

New construction for a 2000 square foot home with a simple design – average cost is $80 per square foot which equals $160,000 excluding land cost.

A 2,200 square foot home with more pitch in the roof and a 3 car garage with stone facing is $90 per square foot or $198,000 excluding the cost of land.

Larger homes with more amenities and “nooks and crannies” cost more to build. From these examples you can get a general idea of building costs.

Cost Saving Tips

There are many different things you can do to save money when building a new home. First it is best to take the time to research online the type of home you are interested in and even try to find the blueprints. A site such as has over 26,000 blueprints for new home construction and you can view these prints and purchase a set if you find the right house for you. Ordering blueprints online is much less expensive than actually working with a builder to create prints. The less time a builder has to spend with you, the less money you have to pay him.

Research and learn how to be your own general contractor. Take the time to create a budget and visit home stores to price various materials. Visit the county auditor’s website in the area you are going to build and find out how much it a comparable home was when it was new. Compare that with inflation and your estimates so you are not overcharged by the builder. In addition if you are the general contractor you are in charge of hiring your sub-contractors and scheduling them. You can keep things going so you don’t have costly delays in the building.

There are many different factors that affect the cost of building a new home in the United States. With time and research you can save money by becoming your own general contractor.


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