How to Estimate New Home Construction Costs

2023 August 14

The process of building your dream home can be as unique and personal as the home itself. It also has its fair share of twists and turns, especially when it comes to understanding construction costs. With constantly fluctuating material prices and labor costs, obtaining an exact estimate can be challenging. 

You shouldn’t have to worry about these things — you should be able to focus on designing and personalizing your home! That’s why we’re empowering you with the knowledge you’ll need when planning construction. We’ll break down the process and decode new home costs now so you can concentrate on perfecting your dream home in the future.

Understanding the Average Cost to Build a Home

When you picture your dream home, you likely see more than just a building. You see a sanctuary, a haven where your family’s life unfolds. In 2023, bringing this dream into reality will cost an average of $100-$200 per square foot. For a 2,500-square-foot home, this translates to somewhere between $250,000 to $500,000. However, this is a ballpark figure and many other factors can affect the final cost. These factors are unique to each home and are part of what makes your home truly yours — they include:

  • Location of the property
  • Current material prices
  • Quality of the finishes
  • Standard or custom-built floor plans
  • Features of the home

A luxury home with high-end finishes like granite countertops, smart home integration, crown molding, and more, could cost up to $400 to $500 per square foot. With all these variables considered, the average cost to construct a new house in the USA sits at $248,000, with a possible range of $178,000 to $416,000 based on size and location.

It’s important to note that this price does not factor in the cost of land, financing, and landscaping, all of which can significantly add to the overall cost of the home.

custom home features

The Breakdown: Where Your Money Goes

Let’s break down those costs involved in residential construction. The total expense typically falls into three major categories: Pre-Construction Costs, Construction, and Interior Home Finishing Costs.

Pre-Construction Costs

In the pre-construction phase, various aspects are instrumental in steering your project towards construction, accounting for about 10%-25% of the total budget. Here’s what that includes:

  • House Plans: Depending on whether you opt for standard or customized designs, the cost of plans can fluctuate between a few hundred dollars to over $8,000.
  • Land Purchase: This cost depends largely on location and size. Typically, housing development lots hover between $50,000 and $100,000, while rural undeveloped land might only set you back a few thousand dollars.
  • Land Preparation: This involves tasks such as connecting to utility lines, conducting soil tests, land surveying, tree clearing, excavation, and grading. The cost for these tasks, along with acquiring permits, can collectively range from a few thousand to tens of thousands of dollars.

Construction Costs

The costs of construction generally involve the structural “skeleton” of the home and are usually split 50/50 between materials and labor. Key components of this cost category include:

  • Foundation: This can range from $6,000 to $30,000 depending on if it’s just a concrete slab or a full basement.
  • Framing: As the bones of the house, framing is one of the costliest parts of the process, typically ranging from $20,000 to $50,000.
  • Building Systems: Including plumbing, electrical, and HVAC systems, these are labor-intensive and can cost anywhere from $30,000 to $75,000.
  • Exterior Finishes: The cost of siding, roofing, exterior windows and doors, brick, stucco, and similar items generally totals around $30,000 to $60,000.

Interior Home Finishing Costs

These costs vary considerably, with a broad spectrum ranging from around $40,000 to over $150,000. These final touches define the aesthetics and functionality of your dream home and represent the realization of your vision. They also contribute significantly to the total cost, particularly if you gravitate toward high-end selections. Let’s break down the key elements of interior finishing:

  • Cabinets: Crucial for storage and style in kitchens and bathrooms, costs range from $3,000 to $30,000, contingent on material, design, and installation.
  • Countertops: Key for kitchen style and use, costs of granite, quartz, marble, or laminate vary from $1,000 to $5,000.
  • Flooring: Foundation of interior design with various material options; costs vary from $10,000 to $40,000.
  • Paint: Significant for the home’s ambiance, professional painting costs range from $4,000 to $11,000, based on house size and paint quality.
  • Lighting: Essential for function and aesthetics, lighting costs, including fixtures and installation, range from $2,000 to $13,000.
  • Interior Doors: Interior doors add to the aesthetic and privacy of each room. Depending on the style and material chosen, these can range from $5,000 to $20,000.

custom built kitchen

Factors that Influence Construction Costs

Just as we’ve discussed in our home-building timeline, the complexity of the project significantly impacts construction costs. But several other elements play into the total expenditure of creating your dream dwelling.


The diversity of materials available for building your dream home is staggering, and your choices can significantly impact the cost. As you estimate the costs of new home construction, ask yourself: How much do I wish to invest in building materials? During the planning and design stages, the expert home builders at Eagle Creek Homes can help you navigate this question. We strive to ensure you get the best quality materials that align with your vision, while conscientiously respecting your budget.

Permit Fees

The cost of securing a permit to build a home varies widely based on your location, often ranging from $500 to $2,000. While this may seem like a minor detail in the grand scheme of building a home, it’s an essential part of the process and an integral part of the budget.

Additional Costs

Building a home isn’t just about laying the foundations and watching the walls rise; many other factors contribute to the total cost of your new dwelling. From closing costs to preparing the land for construction, moving expenses, and other potential hidden costs, it’s essential to have a comprehensive understanding of what to expect. We invite you to learn more about these factors in our detailed guide on the hidden costs of building a home.

Selecting a Home Builder

Choosing the right home builder is crucial to ensure that your hard-earned money is invested wisely in a home that will bring you joy and peace of mind for years to come. Trust, transparency, and expertise are the key elements to look for when making this decision.

You’re in Good Hands with Eagle Creek Homes

At Eagle Creek Homes, we don’t just build houses; we help create homes. We understand that every home is a unique expression of its owner, and we cherish the opportunity to turn your vision into reality. We work closely with you throughout the custom home-building process, ensuring that your home not only fits your lifestyle and aesthetic preferences but also stays within the boundaries of your budget.

Our dedication to quality and client satisfaction is unwavering. From the initial consultation to the moment we hand you the keys to your new home, you can trust Eagle Creek Homes to deliver a home-building experience that’s as enjoyable as it is efficient.

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