Average new home construction cost per square foot varies by state, and ranges from $75 to $130 per square foot. Homes in the Southeastern and Midwestern states cost much less than homes in California, Hawaii and the Northeastern states. In addition building cost averages vary from city to city and are different in rural areas than in cities or suburbs.
Average New Home Construction Cost Per Square Foot: How Does Location Matter
• Cost of lumber is less in areas where trees are harvested.
• Cost of other materials varies by the inflation rate and cost of living in each state.
• Labor costs are necessarily higher in areas where the cost of living is high.
• Construction labor costs are higher when a smaller percentage of the population is skilled in construction trades.
• The quantity of luxury houses compared to the number of budget homes built in a state, can affect the average cost of a home.
• Degree of supervision by building inspectors and the enforcement of various codes in different areas.
• The number of luxury items that are considered common or standard in the average home in a given area. For example in some areas a pool is considered a must, but in most areas it is not common or average to have a pool. In some areas it might be a luxury to have a dishwasher, but in most areas this is very commonplace.
• The degree of completeness under which the average home is turned over to the buyer is a large factor in the average cost per square foot. It’s much cheaper to have a shell built and do your own indoor finishes. It is even cheaper for the homeowner to do all or most of the labor start to finish. In areas where this is common practice the average cost per-square-foot is lower.
The likelihood of homeowners doing all or some of the work is a major determining factor in the average cost per square foot. This factor varies according to the predominance of skilled construction labor in the area. In some areas basic carpentry skills are common to nearly everyone, and nearly everyone has a close friend who has experience in home construction. In other areas, most people do not engage in basic carpentry activities, so it is unlikely that they will do work on their own homes, or drive a good bargain with the builder.
The climate in any given area determines the type and quality of construction. Deep foundations or basements are required in the north because of the frost line. In some areas of the Southeast basements are actually counter indicated because of the high water table, and tendency of basements to flood. Steep roofs are important in the North, in order to shed snow. In much of the Southeast the rainfall determines that all roofs have at least a 30 degree pitch. In more arid climates roof pitch is not much of an issue. West Coast construction involves special techniques and materials to protect the home in the event of earthquakes. Likewise coastal cities require special measures to protect homes in the event of storms and flooding. All these variations dictate a difference in cost per-square-foot.
• Shell homes
• Log kits
• Building a smaller home
• Used shipping containers
• Alternative green materials
• Salvaged materials
• Flea market finds and bargain shopping for trim, storage and finishes
• Rammed earth
• Shotcrete over thick polystyrene or polyurethane insulation
• Shotcrete over pumice stone
• Creative use of Ferro cement techniques
• Sales at the home improvement store
• Bargain shopping for discontinued stock cabinets
• Carpet remnants for small rooms
• Doing your own paint and wallpaper
• Doing your own built in cabinetry
• Hanging your own drywall
• Creative use of interior finishes
• Shopping for a builder slightly out of your area, if area builders are too expensive
• Being your own contractor and hiring subcontractors
There are cost averages, but then there are always ways to save money using your own labor and creativity. Obviously, if some of the homes in your area are luxury homes then some are budget homes. Therefore the average is an average between the luxury homes and the budget homes, with some homes costing more than the average while others cost less than the average. Of course you can pay less in most cases, but be careful not to compromise builder skill or reputability, structural integrity or energy efficiency. Any of those types of compromises could turn your new construction into a disaster. For more information on this and other topics, see our 98 page free guide and enjoy the other articles on this site. Average new home construction cost per square foot is not a good indicator of what your home will cost, but rather reflects a host of variables and trends in your state.