There are a number of benefits to building a house from the ground up rather than buying a finished home, among them complete control over the location, design and interior and exterior finishes. Before you go with building over purchasing, however, take a close look at the bottom line to ensure a new house build fits your budget.

Here we’ll outline the average national costs for each phase of a home build, according to the latest data by the National Association of Home Builders (NAHB). The real estate market is red-hot now. Increased buyer demand, coupled with the rising cost of building materials, means current numbers are significantly higher than those reported in the NAHB’s 2019 Construction Cost Survey, which was published in January 2020.

This steep rise in costs is largely due to an imported lumber shortage that has driven up the price 188 percent, increasing total spending on a new home build by almost 10 percent. Use the numbers below as a jumping-off point for your budget. Then make sure to research prices in your area for an accurate estimate of actual costs.

Construction Costs of a New House Build

According to the NAHB’s 2019 survey, the average construction cost of a typical single-family home was $296,652. This breaks down to about $114 per square foot, an increase of $28 since 2017.

It’s interesting to note that while the average construction cost has increased, the average single-family home size has declined. The 2019 survey reported an average of 2,594 square feet of finished floor space, the smallest since 2011.

Construction costs typically account for around 75 to 80 percent of the total cost of a home build. The cost of purchasing the land, preparing the lot (including septic and sewer work, as well as clearing and grading) and financing make up the remaining 20 to 25 percent.

The NAHB breaks down its construction cost survey into eight major stages, assigning a percentage of the total cost to each stage. Each category includes all the related costs, including labor, cost of materials and hiring subcontractors.

1. Interior finishes: 25.4 percent, or about $75,350;

2. Framing: 17.4 percent, or about $51,600;

3. Major system rough-ins: 14.7 percent, or about $43,600;

4. Exterior finishes: 14.1 percent, or about $41,800;

5. Foundation: 11.8 percent, or about $35,000;

6. Final steps: 6.8 percent, or about $20,200;

7. Site work: 6.2 percent, or about $18,400;

8. Other costs: 3.8 percent, or about $11,300.

Interior Finishes

This stage accounts for the largest share of construction costs and the largest fluctuations, depending if you choose high-end finishes like hardwood floors and designer lighting or more budget-friendly options. Interior finishes include insulation; drywall; interior trim, doors and mirrors; painting; lighting; cabinets; countertops; appliances; flooring; plumbing fixtures; and fireplaces.

Framing

Framing (including roof) and trusses are another major construction cost, and you won’t have much budget leeway unless you go DIY with the labor.

Softwood lumber prices spiked over the past year, increasing the average price of a new single-family home by more than $24,000. So consider this carefully when calculating the cost of your house build. This stage also includes sheathing and general metal and steelwork.

Major System Rough-Ins

Plumbing, electrical wiring and HVAC systems are major cost considerations, with the total based on the size of your home and number of bathrooms.

Exterior Finishes

As with your home’s interiors, the cost of your exterior finishes will vary based on the materials you choose.

Exterior wall finishes, like brick or stone, will drive up the cost much more than more inexpensive options like vinyl siding. A solar panel roof can cost twice as much to purchase and install as traditional asphalt roofing. Custom windows and doors, including high-end garage doors, will also impact your total.

Foundation

The price of ready mix concrete has been steadily increasing over the past two years, driving up the cost of pouring a foundation. A simple slab foundation is the most budget-friendly option. A basement is more expensive due to the additional excavation, concrete and rebar reinforcement required.

Final Steps

Final touches like landscaping and outdoor structures such as a porch, deck or patio enhance your home’s curb appeal. But if you opt for elaborate landscape design or outdoor living spaces, it can really jack up the cost. The NAHB also includes items like the driveway and final site cleanup in this category.

Site Work

Before you can break ground, you’ll need the proper permits. Building permit fees, impact fees, water and sewer inspection fees and architectural and engineering plans may seem like small details, but these costs run into the thousands.

Additional Construction Cost Factors

Location

One of the biggest factors in calculating the final cost of a home build is location. According to the 2020 U.S .census report, the most expensive region in the U.S. to build a home is the West, followed by the Northeast, Midwest and South. Fees and other site work costs vary by city, county and state, so be sure to do your homework when choosing a location for your new home.

If you decide to build in a rural area, you may encounter additional costs for installing a septic system or sewer hookup; propane for heating; electric and telephone line hookups; and building a long lane to connect with the main road.

Size

Unsurprisingly, the square footage of your new home impacts the total construction cost. And yet, small two-bedroom homes in A-list cities finished with high-end materials and appliances can cost the same as slab houses three times the size in less expensive regions of the U.S. built with cheaper materials.

Customization

A custom home, designed to your specifications by an architect and built by a general contractor, costs more than purchasing a home from a developer in a planned subdivision offering several models. Because the developer is building multiple houses at the same time, many costs can be kept in check. But the customization of your home is limited to details like internal finishes and landscaping.