How to Understand the Average Cost to Build a 1500 sq ft House

When it comes to building a new house deciding on the size you want is important, and many factors will play into that including the cost to build, the size of your family, and your budget. For many, a 1,500 square foot house might seem like a small home, but you can still fit in 2-3 bedrooms, making it the ideal house for a couple or small family.

We look at how the average cost to build a 1,500 sq ft house is calculated and what can influence that cost.

If you are planning to build your dream home in Chicago, speak to Fortress Home, trusted and experienced (20+ years) custom home builders, with an eye for quality and a reputation for effective time and budget management. Call +773-770-8607 or email [email protected] today.

House sizes

Did you know that the average size of houses in the US has almost doubled since the 1970s with the average new house being 1,660 square feet in 1975, and peaking at 2,740 square feet in 2015? But this trend is on the downturn with the average new home being built in 2020 coming in at 2,300 square feet. Whether this is down to a trend for simpler more minimalist lifestyles - thanks Marie Kondo, we can't be sure, but all of a sudden building a giant mansion seems rather excessive.

Smaller houses have many advantages, including being more affordable, easier to keep clean and maintain, and faster to build. And while a 1,500 square foot house may seem small by US standards it's still bigger than the average house size in many other developed countries, including most of Europe. In Denmark, the average house size is just a touch under 1,500 square feet, while in Sweden it comes in at a much more compact 900 square feet.

Is 1500 square feet big for a house?

Many people worry that 1,500 square feet is far too small for their needs but what can you really fit in a house this size. We checked out some existing house plans for you:

  • 2-bedroom, 2.5-bathroom ranch style house
  • 3-bedroom, 2-bathroom Acadian style house
  • 3-bedroom, 1.5-bathroom modern style house
  • 3-bedroom, 2-bathroom craftsman style house

As well as those bedrooms and bathrooms you can also expect to fit in a good-sized kitchen, a separate dining room, a living room, and even a separate laundry room.

So as you can see, a house this size is very suitable for couples without children, empty nesters, or even small families.

Building a 1500 square foot house

When it comes to building a house there are many components that go into the total price. While at present in the US the national average cost to build a 1,500 sq ft house is $187,500, according to HomeGuide, and $248,000 according to HomeLight, there are many factors that can influence that price.

These figures above also only include the materials and labor so many of the items listed below will be on top of that average cost.


Before you can build your own home you will need a piece of land, which can vary wildly in price across the country. If you are lucky enough to already own some property the cost of building a house on your own land will be reduced.

The general size needed for a house is between 2.5:1 and 3.5:1, in order for you to have a reasonable sized yard and space around your home. So with the mid-point being 3:1, you would need a 4,500 square foot plot to build a 1,500 square foot home.

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Land prices by state

The average price of an acre of land in the US varies by state, as well as if the land is urban or rural, ready prepared and zoned for building, or far away from utilities and roads. For example, the average cost of an acre of land is:

  • $196,410 in New Jersey
  • $23,492 in Illinois
  • $1,558 in Wyoming

Architect fees and plans

A vital part of the home building process is choosing the right design for your home. You can save money by buying standard plans off many websites and these can cost as little as $2,000. If you are looking for a custom home and want an architect to design a custom single-family home especially for you, it could end up costing 1-8% of the total build price, or $80-$150 per hour.

Building permits and inspections

Before your home construction actually begins you need to make sure all inspections and permits are in place. These may include:

  • Building permits - $1,000 - $2,000
  • Inspections for utilities - $500
  • Land clearing - $1,500 - $3000

Hopefully, all your inspections will go well and the land is ready to build on, and hiring structural engineers isn't necessary.

General contractor fees

Another addition to the total project cost of building a house is hiring someone to manage the construction project for you.

Working with professional and experienced general contractors and home builders, like Fortress Home, can help make your residential construction project run smoothly.

This is likely to cost you around 10-20% of the total build costs; and while these costs may seem high, hiring a good general contractor can save you money in the long run. General contractors will:

  • Get the best materials at the best price available using their discounts
  • Hire the most experienced laborers and manage their work
  • Make sure your construction project is fully insured
  • Keep the project running on time, saving you costs on delays
  • Troubleshoot and ensure any problems are quickly fixed or avoided
  • Manage all inspections making sure your house is built to code
  • Communicate with you throughout the process making sure you get exactly what you want
  • Ensure you are happy with the finished house

Labor costs

A vital part of building costs, after you break ground, is paying for all the required labor to make sure your house is well built. According to HomeAdvisor labor costs can be 30% - 60% of the overall cost. Your labor costs will probably include:

  • Carpenters: $70/hr
  • Concrete workers: $110/cubic yard
  • Electricians: $40-$120/hr
  • Flooring installers: $5-$20/sq ft
  • HVAC installers: $50-$70/hr
  • Interior designers: $75-$450/hr
  • Landscapers: $45-$75/hr
  • Painters: $50/hr
  • Plumbers: $75-$130/hr
  • Roofers: $1-$1.50/sq ft

Building materials

When you think of construction costs you probably think of the material cost to build a home and these costs can vary a lot based on the standard of materials you use, from basic materials all the way up to luxury finishes.

Surprisingly materials aren't the bulk of the home building costs, coming in at around $50 per square foot, or 41%-51% of the total cost. Your building materials costs will likely include these elements


The basis of a strong house is a good foundation and excavation, then putting in a concrete slab, retaining walls and backfill is likely to take up around 12% of the home costs.


The framing is the bones of your home and this cost covers, the frame, roof, trusses, and sheathing. Expect this to account for approximately 17% of final costs.

Exterior work

Consider this section of the costs as putting the flesh on your house's skeleton, including insulation, roofing shingles or tiles, siding, other exterior finishes, as well as exterior windows and doors. This is likely to account for around 14% of the total cost.

Installing major systems

A major chunk of costs will go on your major systems which include all the wires, pipes, and ductwork that goes into your plumbing, electricals, and HVAC. Average costs for this stand at around 14% of the total cost.

Interior finishes

The largest portion of the materials budget will go on interior finishes. Many items fit into this category including:

  • Drywall
  • Internal doors
  • Trim, baseboards, molding, stair rails, etc.
  • Painting
  • Flooring
  • Light fixtures and electrical fittings and outlets
  • Fitted cabinets, wardrobes, counters, etc.
  • Appliances
  • Plumbing fixtures like sinks, showers, faucets, etc.
  • Fireplaces

You might note this is before you include furniture in the budget - so always remember to consider that when building your own house. All these interior finishes will account for about 24% of the new construction costs.

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Additional costs

These additional costs may or may not be included in the national average house costs, but you should make sure and include them in your budget. They can include some essentials as well as nice to have features:

  • Final clean up
  • Landscaping
  • Outdoor structures
  • Driveways and paths
  • Swimming pools
  • Decking

Building a 2,000 and 2,500 square foot house

In 2021 the most popular size for new homes is between 2,000 and 2,500 square feet, according to various studies and real estate agents. The average costs of building these sizes of houses nationwide (according to HomeAdvisor) are:

  • 2,000 square feet: $200,000 - $400,000
  • 2,500 square feet: $250,000 - $500,000

Frequently Asked Questions

How much does it cost to build a 1500 sq ft house?

According to HomeAdvisor the average cost to build a 1500 sq ft house is around $150,000 - $300,000. This will vary depending on location, style of home, and the level of luxury you are aspiring to. Most homeowners will end up paying somewhere in the middle of that range when they come to build a house.

How much is an average 1500 square foot house?

When it comes to buying houses across the country, average prices vary from city to city, but thanks to Business Insider we have these figures for the median value of 1,500 square footage single-family homes in a few major urban areas:

  • San Francisco: $1,292,566
  • New York: $625,931
  • Boston: $588,878
  • Chicago: $261,126
  • Baltimore: $164,297
  • Detroit: $47,241

What is the cheapest type of house to build?

There are several ways to build cheaper houses by keeping either the material costs or labor cost down. If you have the skills and experience, building a house yourself can save you a lot of money (if not stress and time), but for most people, these types of houses are the most cost-effective:

  • Ranch Style homes can be quite affordable with simple layouts and basic materials.
  • Prefab houses save a lot on labor as your house is ready-made in a factory so you get to take advantage of economies of scale. This means the on-site assembly work is fast and efficient.
  • Container homes are an affordable option when it comes to materials, as using shipping containers keeps the materials cost per square foot down.
  • Tiny homes will save you money on both materials and labor as they are so much smaller than standard houses. However, the average cost per square foot of a tiny home is often not lower than that of larger houses.

Building your dream home in Chicago

When the time comes for you to build your dream home and are wondering how much does it cost to custom build a house come and speak to Fortress Home. We have over 20 years of experience in building a wide range of homes across the city and are happy to share our expertise with you.

We will help you every step of the way, from designing your own home, getting all the permits, calculating the cost per square foot and material cost to build a house, and making sure your project runs on time and to budget. Our quality assurance systems ensure that your house will pass all inspections the first time, and the quality of the build will last you a lifetime. Talk to us now, at our family-run business: +773-770-8607 or email [email protected]

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