The costs of building a new home

If you’re thinking about becoming a homeowner, you might be asking whether you should build a house or buy one. Factors such as price and how quickly you can move in might guide your decision.

Construction can mean a longer wait to move in, but it could be worth it if you’re able to build your dream house.

Though, what about the price — how much does it cost to build a home?

While the average cost to build a house is $283,900, according to HomeAdvisor , most homeowners spend $116,792 – $451,452 to build their homes. Even though you can get a general idea of what you may pay, it’s important to keep in mind that there are numerous factors that will impact the cost to build.

Keep in mind: These numbers reflect the data listed at the time of publishing and may fluctuate. Be sure to check the link for updated costs.

Fees to the builder or an architect to draft the floor plan and model for the home  can add another $2,000 to $8,000 to your budget.

When calculating your potential price, it's helpful to consider the various factors that can affect your total:

One of the most obvious factors that influences how much you'll pay to build a house. The larger the house, the higher the cost.

Real estate is all about location, location, location . Areas where land, materials, permits and labor are more expensive can increase the final tag.

Depending on where you plan to build and how much work needs to be done, your labor costs can vary drastically. If you're adding in a lot of upgrades or using specialized materials, you'll likely pay more.

You can't build a home without the right materials. Depending on the materials and what’s going on in the economy, the price of those items can vary greatly. For example, over the past two years, the cost of plywood and plumbing supplies have soared. An increased interest in home improvements has caused demand to skyrocket, but disruptions in the supply chain has resulted in shortages.

So be sure to consider overall pricing trends before deciding whether building a home is affordable for your own financial situation.

Build vs. buy ? Which one should you choose? Depending on where you’re looking to buy (are prices remaining steady in the area or even decreasing?), you could potentially save money by purchasing an existing property. Buying can also save you stress since you're only dealing with your agent and a lender, such as Ally Home , instead of builders and suppliers.

On the other hand, if you're looking to buy in a hot market, then building could be a cheaper option.

At the time of this article, the median home value in the U.S. is $331,533, according to Zillow . Home values jumped in 2021, rising 19.9%. The 2022 housing market outlook has prices continuing to climb, but at a slower rate.

You could also consider doing some of the work yourself. Keep in mind: DIY could end up costing you more money if you have to pay a contractor to correct any mistakes you might make.

New homes and existing homes have both their pros and cons. When deciding your path to home ownership, cost is an important factor to keep in mind. Whether you build or buy, you want to come home to a place that fits your needs and your budget.