What Does It Cost To Build A House?
Updated February 2022
When it comes to building a custom home on your lot there is no “one size fits” all pricing model. There are numbers of variables to be considered when estimating the cost to build a house. The number one consideration is location. The cost to build varies in different regions, states, counties and cities. Factors affecting cost within each area/market are population density, labor availability, access to materials, land and utility costs. Topography and soil type have a large impact on site and foundation costs. Different types of building materials are used depending on availability, climate, insurance and permitting requirements.
If we confine this discussion on cost to build a house to building in the State of Texas, the aforementioned variables still apply to this diverse State. The cost to build on your lot in the Austin area is different from the cost to build a home in Houston, San Antonio, Dallas/Fort Worth, West Texas or on the coast.
Since custom homes are personalized and unique, design, style, size and complexity vary greatly. A small basic home will cost less to build than a large upscale one however, the price per square foot of a small home may be higher than a large home.
Before getting bids for labor and material it is important to understand a few terms and how different trades approach bidding. Living area, slab area, framed area, wall area and squares of roofing are measures used by various subs in bidding. The foundation contractor charges per sf of slab area. Framers bid on the total framed area (living area plus porches and garage). HVAC is bid on the living area. Masons charge on the sf of wall area. Roofers bid based on the number of squares of roofing (a square equals 100 sf of roof area). Plumbers charge per fixture for example each faucet, toilet, gas connection etc.
Getting actual bids to calculate the total cost to build a house can be a difficult task for someone not in the building industry. Fortunately, there are some rules of thumb and price ranges that can give us a preliminary idea of cost to build. The price per square foot of living area and framed area are two ways to ballpark the cost to build a house. As stated earlier there are a lot of variables to be considered so we will need to use a range of values vs one number. This range should include the total cost to build including soft costs (permits, tap fees, utilities, engineering, insurance, builder fee, plans, dumpster, potty etc.) and hard costs (foundation, framing… paint etc.) The cost of land is not included. We should also qualify the market area being considered.
Let’s consider the cost to build a house in the Greater Austin area. I commonly see cost per square foot of living area running $180 to $200 and cost per square foot of total framed area $140 to $160. For example, if the living area is 2500 sf we might apply a cost of $180 which equals $450,000. If the framed area is 3500 sf and we apply a cost of $140 the cost is $490,000. This range can give you a preliminary idea of the cost to build a house excluding land. This range of cost may or may not be applicable to your particular project. If you have a preliminary plan an Owner Managed Homes consultant can work up a detailed estimate as part of our free consultation.