February 2nd, 2022 at 11:00 am

New home being built - how much does it cost to build a new house

Moving into a home of your own is a dream come true, giving you and your family a safe, secure space to grow. While most people buy pre-built properties, many others dream of buying a lot of land and building a whole new home or demolishing an old home and rebuilding the existing foundation.

Building a new house can seem daunting, and it is certainly a longer and more involved process than purchasing an existing property. Building a house can potentially be more affordable, but the main benefit of building new is getting a home that is completely customized to your family’s specific needs. How much does it cost to build a new house? Read on to learn more.

Average cost to build a house

The exact cost will vary based on a dozen different factors, including the size of the property, the location of that property, interior finish, exterior finish, energy efficiency, lumber prices, and how luxurious you want your new house to be (all of these factors would also determine how long does it take to build a new house). You should also consider what kind of house you’re building. For example, a small, self-sustainable house made from a storage container will likely cost less than a large smart home that includes a variety of other amenities, like an in-ground pool and several bedrooms.

On average, how much does it cost to build a house? Most experts suggest home construction costs be about $100 to $200 per square foot with the total cost equaling about $300,000 on average. As an average, that also means there are plenty of homes below and above that price. Prices can range from about $150,000 to over $475,000. In terms of square footage, the highest cost per square foot is closer to about $500. According to a 2019 survey from the National Association of Home Builders (NAHB), a typical single-family home costs over $485,000, and about 61 percent of that cost went to construction alone.

Home construction has not escaped the effects of the COVID-19 pandemic either. The cost of certain construction materials has skyrocketed as supply lines have seen shortages. Labor shortages have also led to longer lead times.

The cost of building a new home in California

California has been a dream destination for people worldwide thanks to its vast beaches, great weather all year round, and proximity to multiple different ecosystems. That also means most of the property in California tends to be the highest in the country, and that frequently applies to newly built homes as well.

The exact cost can vary from city to city, county to county, but the cost to build a home in some of the most popular areas:

Overall, the average cost to build a 2,000 sq. ft. house in California is about $405,000.

What costs go into building a house?

It’s important to understand that the above prices involve the actual building and construction of a new home, but there are many moving parts involved within that, particularly materials and labor. Learn more about what actually goes into the costs below.

Plot price

This is the first thing that you will spend money on, but the above prices and averages for building a new house do not include the price for the actual plot of land that the house will sit on. Land value can vary widely just from plot to plot based on a near endless list of factors, like the potential views, the amount of sunlight, and the soil quality.

Water and sewage inspection

Another pre-construction cost to factor into your budget is the water and sewage inspection. This involves checking the land to see if the house can support new water lines and a waste drainage system, which is important in general but especially important for homes by the water. You can expect this inspection to cost $4,500, though this price will go down if there are existing plumbing lines.

Demolition or deconstruction

If there is an existing house on your desired property that you want to get rid of, you will have to pay for the demolition. Deconstruction involves saving and selling some parts of the house. Demolition can cost $6,000 to about $20,000, while deconstruction can cost over $24,000.

Design and architecture

You can purchase premade house plans or go all out and create completely new, customized blueprints. The former comes with a minimum fee, but the latter will require you to hire and consult with an architect and design team. Fees for an architect can vary but usually comprise up to 12 percent of the construction cost.

Construction management

It might cost extra, but hiring a professional construction project manager is a good idea for corralling all the different components and making sure everything stays on track. This includes:

If you are working with an architect, they may suggest a construction management firm, but make sure you hire someone with experience. Construction management can run you about 5 to 15 percent of the total construction costs. The labor cost can sort of be an investment if you find the right crew.

Permits and local fees

Before you even break ground, expect to pay a handful of fees with your state and municipality, along with building permit costs.

Excavation and foundation

The beginning of your new home starts with excavating the foundation. This prepares the ground for a solid foundation. Excavation can cost upwards of $3,200.

From there, it’s creating the actual foundation. The foundation is arguably the most important part of your house, and it also happens to be costly. A shaky foundation can make the rest of the home construction process nearly impossible, and if that construction does finish, you would be looking at a perilous and costly living situation. Expect to pay $4,500 to $13,500 for a basic slab foundation, while a basement foundation can cost upwards of $80,000.


This is when your new home starts to take shape. A good frame ensures solid and efficient construction, structural stability, and safety against the elements. Framing typically includes the floor, walls, and roof trusses. For most new home builds, the framing will be the highest material cost with a price tag of about $33,000 for good lumber and $20,000 for metal stud framing. 

Roofing and siding

Your roof costs will depend on the type of roof and roofing material you go with. Shingles can range from $5,500 to $11,500. Asphalt shingles tend to be the go-to for most home builders, thanks to their affordability.

Siding serves a similar role as roofing and can dictate your home’s overall durability. Much like roofing, siding costs depend on the type of siding, which ranges from simple vinyl wrapping to natural stone, but the average cost is usually about $12 per square foot.

Driveway and landscaping

If you don’t drive or have a car, you won’t have to worry about this expense, but if you do, it’s a good idea to have some off-street parking. A gravel driveway will run you about $1,500, while a fully paved driveway will cost about $4,500.

Even with the actual house mostly done, landscaping is what turns your property into a real home. For basic landscaping involving some sod and plants, expect to spend about $2,000. You can spend even more to add flowers, trees, and other landscaping elements. It might seem like an excessive expense, but landscaping can increase your curb appeal and provide you with some great space to start a garden or create a yard for outdoor fun.


Even with the actual house fully constructed, there is still a lot of work to do in the interiors to make that home functional. Installing a whole HVAC system, including ductwork, a furnace, and air conditioning can cost up to $12,500.

Along with HVAC, you want good insulation to keep in the warmth and keep out the cold. Insulation comes in various forms, including spray foam and batting. Fully insulating a new home can cost about $4,000 for materials and labor.

Plumbing costs largely depend on the type of plumbing material that you use. PVC will cost less than copper, but might be more prone to problems down the line. For a 1,500 sq. ft. home, you can expect to pay about $9,000 for copper piping, while PVC pipes might cost half of that.

Wiring your home is essential, but it comes with plenty of complications. If you don’t do it right, it can also be dangerous, so make sure you hire an experienced electrician. On average, you can expect to pay about $8,000 or $4 per square foot to wire your home.

Then there are all the other indoor storage accoutrements and appliances. Cabinets and countertops cost about $6,550 and $2,450, respectively, while new kitchen appliances can cost $3,750. Take into account other aesthetic touches, like flooring, trim, paint, and fixtures.

Should you purchase a tract house or spec house?

While custom-built houses can be modified to your families’ needs, the downside to them is that the price can be subject to change depending on certain variables, such as when you make changes or there were problems during construction. One way you can mitigate the cost is to purchase either a tract house or spec house. You might be wondering, “What are tract homes?”Or “What is a spec house?”The former is a house built on a tract of land lined with other similarly designed houses. A spec house, on the other hand, is a house that’s already constructed before the buyer purchases it. Tract homes have fixed prices because the home builder buys the materials in bulk, while spec homes have more flexible prices depending on how long the property has been listed on the market.

Building a new house can be exciting and provides a full sense of customization and control, but it’s not without complications. If you need any help, the team at Berkshire Hathaway HomeServices California Properties can navigate you through the process and help you find and build the home of your dreams.

Still wondering how much does it cost to build a new house in Southern California?

Connect with a New Homes Specialist today.

Sources: Nerdwallet, Forbes, Homebuilder Digest, Superior ADUs, Los Angeles General Contractor

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