It’s widely acknowledged that homes aren’t inexpensive. For numerous individuals, choosing to construct a new house ranks among the biggest monetary choices they will ever face. Starting fresh with construction allows for personalization according to individual preferences, yet this option carries substantial costs.
Recently, the National Association of Home Builders unveiled findings from a poll conducted among 4,000 homebuilders. This detailed breakdown reveals the cost associated with every phase of constructing a new residence in 2024. Construction expenses accounted for approximately 64% of the total price tag of these newly constructed homes, which averaged around $428,215 apiece. The remaining portion of the final sale price encompasses various expenditures including overheads, general fees, as well as additional factors such as financing charges, promotional spending, and real estate commissions.
Therefore, what does the figure of $428,215 encompass? In this section, we will dissect the typical costs associated with constructing a home by breaking down each element. We'll explore the key phases involved in new construction and understand how these various components collectively add up to the total expense of building a house.
Site Work
Before a house exists, there must first be a plot of land. In 2024, operations related to preparing the building site accounted for an average contribution. $32,719 The expense associated with constructing a new house includes various aspects involved in readying a location for development, ranging from expenses related to engineering and architectural designs to obtaining permits for construction. This preparatory phase isn't concluded once actual building begins; further assessments are necessary during different stages of the construction. Nonetheless, this initial groundwork constitutes only about 7.6% of the total expenditure in the creation of a new dwelling.
Foundation and Framing
The foundation and framing provide the structure and groundwork for a house, so it’s crucial to ensure these elements are executed perfectly. According to the NAHB, the typical cost for framing a house averages out to be $70,982 In 2024, foundations were more affordable, typically costing around $44,748 According to the new house data, combining the costs for laying the foundation and constructing the framework accounted for more than 25% of the overall expenses in homebuilding.
Major System Rough-Ins
Certainly, a house goes beyond being merely a concrete foundation and a timber structure. In today’s homes, three primary systems are essential: plumbing, electrical, and HVAC. These components each have similar costs in 2024, typically amounting to roughly the same figure on average. $27,ooo . Altogether, the upfront expenses for setting up these systems were $82,319 —and that doesn’t include any appliances or fixtures.
Interior and Exterior Finishes
So, you have a house complete with its foundation, structure, and key systems... what remains is to wrap up the project. In 2024, completing the exterior proved to be relatively budget-friendly during new home construction, typically costing around $57,510 For projects involving external wall surfaces as well as the fitting of windows and doors.
The interior finishes turned out to be the priciest segment in the study. This is logical since numerous elements of building projects are classified under "interior finishes." Things like insulation, drywall installation, painting, cabinetry, appliances, and much more collectively averaged out to a significant expense. $103,391. That amounts to roughly a quarter of the total expense for constructing a new house, with this entire amount being allocated to a single phase of the build process. The cabinets represented the priciest component of the internal finishing, typically costing around $20,000 per new home.
Last Stages of Building and Additional Costs
Following all those stages, we reach the last phases of building. This phase can be described as adding the finishing details which include tasks such as laying down the driveway, constructing porches and patios, along with overall clean-up at the location. Fortunately, this concluding part turned out to be the most budget-friendly segment on an average basis, amounting to $27,710 Per new home, the NAHB additionally added a concluding "Other" category in the survey that encompassed $8,835 In expenses that couldn't be directly linked back to the other categories.
Total Sales Price Breakdown
So that’s where the $428,215 In new home constructions, the costs originate primarily from those factors. However, this accounts for roughly two-thirds of the overall sales price. When additional expenses such as financing, marketing, and an 11% profit margin for the constructing company are factored in, the typical total sales price of a newly built home in 2024 amounted to. $665,298 If you're considering constructing a house from scratch, ensure you account for all the expenses involved before embarking on your quest to build your ideal home.
Source:
NAHB, “ Expense of Building a House - 2024 ” (2024)
