How much does it cost to build a house?

Before you embark on the exciting journey of building your dream home, it’s important to know the cost of building one and the expenses to expect after you move in. But since home building is such a niche topic, it’s nice to get some insights from the experts; namely, us. Marketplace Homes has been a leader in new home construction for over two decades, helping people build their own home with the floor plan, materials, and amenities they want.

How much is it to build a house?

To build a house, it costs an average of around $298,000 according to Rocket Mortgage. The price can range vastly, with a price range between $111,000 – $484,000, depending on the housing market, square footage, house plan, cost of land, building materials and supply chain affecting costs, high-end upgrades, quality of major systems, general contractor labor costs, custom home additions, exterior finishes, legal work like acquiring a building permit, and so much more.

The sale price of tiny homes will be significantly cheaper than a 5-bedroom single-family home. The home building process grows in cost with the size and complexity of the project. Home costs also rise in more expensive markets like Southern California or New York.

In every location, the average cost can fluctuate depending on these factors. If you plan to use a new construction loan, you should also figure in the cost of borrowing which includes loan origination fees and the interest you pay monthly.

How much does it cost to own a new construction home?

While we can’t give an exact number since there are so many variables, here are some typical house costs that you can expect to pay after you own a new construction home.

Property taxes and homeowners’ association (HOA) fees

Regardless of where you live or whether you buy a new home or an existing home, you’ll always be expected to pay property taxes. The amount is determined by the local township, city, or county your home is in. Much like how we pay taxes on items we buy, you’ll have to pay a percentage of your home’s assessed market value in taxes.

The amount can total up to a couple of hundred dollars per month or easily over a thousand dollars. It depends. What’s more, if you make any alterations to your property (i.e., build a pool, patio, shed, install new kitchen counters) or really turn up that curb appeal when the property assessor comes by, your property tax can increase because it all depends on your home’s market value.

Homeowners Associations

In addition to property taxes, most neighborhoods these days have an HOA fee, which will cover maintenance on common areas (i.e. the entrance to the neighborhood, snow removal services for roads, etc.). Fees can range widely and so can the services that are included from neighborhood to neighborhood. You might also find that the HOA fees in a newly built community are high initially but as more people move in, the fee can lower as fees are divided among more residents.

Additional fees may also be included from time to time. For example, if roads in your neighborhood become damaged and need a major repair or if a storm knocked down a tree in the neighborhood entrance, you may find those costs have been divided up and added to your following HOA bill.

hidden costs of owning a home - landscaping

Homeowner’s Insurance

This one shouldn’t surprise you as much, since your mortgage lender or bank may already require this from you before they can give you your estimate. Your mortgage lender may also group your insurance, taxes, mortgage together in a bundle called PITI – principal, interest, taxes, and insurance.

Your homeowner’s insurance should be a fixed cost, but it can also be subjected to changes. You should read over your insurance and understand what you’re covered for. Generally, a basic homeowner’s insurance does not protect you from mother nature.

For example, if you live in a high-risk flooding area, your insurance will not cover your house when it floods, and you will need additional flood insurance to cover that risk. The same sort of thing goes for other disasters like tornadoes, hurricanes, and earthquakes. You will need to purchase additional coverage or upgrade your homeowner’s insurance to cover what you need.

Landscaping and Lawn Care

Everything is new about your new construction home, including your lawn. In most cases, new builds will come with freshly sodded or seeded lawns that need to be watered frequently or they can be completely bare. Your home’s exterior will be ready for you to design however you wish. As much fun as that sounds, unfortunately, building out your lawn with plants and landscaping designs can get pricey quickly.

And after your plot of land is fully decorated, you’ll need to spend some money maintaining it every year. It’s difficult to nail down exactly how much you will be paying for your landscaping. According to, the average homeowner spends $3,000 to $15,950 for new landscaping installation for their home.

We recommend ballparking what you want to be done for your landscaping and budgeting some wiggle room. You never want to go in without a plan of what you want or an idea of how much it is going to cost you.


No surprises here either. HVAC system costs are among the most significant, especially if you live in an area with harsh winters or hot summers. You have to pay these fees whether you live in the house you own or lease a home. And remember, the larger your home’s square footage, the more you should expect to pay in heating and cooling your home.

Although basic utilities shouldn’t cost you very much compared to some of the other items on our list, don’t forget to budget them into your finances as you will be expected to pay these bills routinely for your home.

General House Maintenance

The beauty of owning a new build is that you’ll basically be maintenance-free the first couple of months, maybe even the first year. You won’t need to ask an electrician to update your electrical system, for example, since it’s up-to-date.

Though there are things you should do routinely to keep your home in tip-top condition, the efforts and costs of those things should be nowhere near as expensive as maintenance in an existing home. The more you DIY here, the more you save.

Most of your appliances and windows along with other aspects of your home will be covered under warranty. You should discuss these with your builder and find out what is covered and keep a record of how long your warranties will last.

Mind the Filters!

Some initial maintenance tasks you may be expected to perform in your first couple of months in your new home are changing the furnace filters and cleaning your gutters. There may be construction particles such as dust or dirt, so you’ll want to check how your filters are at the end of the first month.

Typically, you want to change these filters every 90 days. Dust accumulates naturally over time, and there’s no escaping that. And unfortunately, you’re bound to have leaves or debris in your gutters, even a new build can’t avoid that. You’ll either have to hire someone to clean out your gutters (especially in the fall season) or if you’re handy enough, you can clean them yourself.

Future Upgrades

When you buy a new construction home, you should hopefully get all the bells and whistles from the get-go, because including them in construction costs is much cheaper than a renovation. Rolling all the upgrades into the overall cost of building saves you time and money on future subcontractors.

But if you decide to go with cheaper materials and get premium upgrades later, you can figure in costs of things like granite countertops, sleek interior finishes, hardwood floors, and superior roofing shingles. For any project, the cost typically increases by square foot. Check useful sites like Homeadvisor for the national average of your desired project as these costs will change year by year.

How much does it cost to build a house?

There are many types of homes out there that differ in cost breakdowns due to its local market’s average prices, size, desired material costs, installation costs, and more. Authoritative sources agree that the average cost is around $300,000, but it can easily be more in more expensive markets. Thankfully, owning a home has major financial benefits, making the total cost of building a new house worth your time.

The best way to prepare for home building costs and owning a home is to speak to an expert, whether that’s us or to your trusted financial advisor or mortgage lender.

Build a New Construction Home

Building a new construction home can be a valuable investment and a way to build your equity, however, if you’re a first-time homebuyer these extra costs can take you by surprise. You’ll likely hear so much about mortgage payments, mortgage payments, and mortgage payments that you may forget some of the other things that come after you move into your new home.

Need some more insights on building your own house? Speak with one of our real estate experts today.


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