When you’re deciding how much to spend on building your dream home, it’s important to understand the costs involved. Costs vary widely depending on region and the type of materials you use. An average house in San Francisco, California costs more than four hundred dollars per square foot, or nearly $4,000 a square meter. That doesn’t include land costs and other ancillary costs, which can add up to more than $200,000 for a flat lot.
If you’re starting from scratch, your costs will depend primarily on the materials you choose. Lumber, for example, can run anywhere from $25,000 to $65,000, depending on size and design. In addition, the cost of concrete and architect’s fees may add thousands more to your budget. These costs don’t have to break the bank, however. Listed below are the main categories of materials that you’ll need to consider.
As a general rule, the cost of building a new home typically takes seven to twenty-four months, but the actual time frame can vary significantly. The timeline depends on the materials that you choose and the accessibility of the site. The first expense, of course, is buying the plot of land. The average cost of land is $300,000. However, the cost will vary depending on the area, soil quality, and the view you want to have from your front porch.
If you have your own land, you can construct your home yourself for much cheaper. However, if you don’t, you may not save much compared to buying a newly built home. According to a study by the National Association of Home Builders (NAHB), the cost of regulatory hurdles makes up a whopping 23.8% of the final purchase price. Of that figure, approximately ten percent of the cost is related to regulation surrounding the land while the rest is related to regulations during the construction process. In addition, each addition to a house requires a permit, which has fees associated with it.
The cost of materials used in building a new home has risen by about 10% from the year prior to the Covid pandemic. Similarly, higher material costs are increasing the average single-family home construction time by several weeks. Meanwhile, the cost of labor is about 40 percent of the total cost. As a result, it is important to remember that the price of constructing a new home is larger than the cost of toilet paper.
When building a new home, the price is higher than that of a preexisting one. Depending on the size of the home, the shell of the house can cost as much as thirty-five thousand dollars. The interior finishes can add another third to the total cost. In addition, bathrooms and kitchens tend to be the most expensive rooms to build. Countertops and cabinets can run up to $13,540. The cost of mechanical systems is roughly fourteen percent of the total cost of a home.
New homes are larger and more customizable than existing homes, but they’re also further from public transit and city centers. In addition to this, land in exurbia tends to be cheaper, which helps you save money on the cost of construction. Home building financing is also very attractive, with many lenders offering competitive interest rates and incentives. One option that works well for many homebuyers is construction-to-permanent financing, which is a single loan that functions like a mortgage.