Understanding Residential Construction Cost Per Square Foot

Building the house of your dreams might be the most important financial decision you ever have to make, so it's important to understand all the cost implications of construction costs, whether that is per square foot or the average cost for a house of the type you're hoping to build. There are many factors that impact the average construction cost, from the price of land to the labor cost and style of home. In Chicago, when you're planning to build your own home, speak to Fortress Home, expert home builders. As a family company, they'll treat you like family too. Call +773-770-8607 or [email protected] today.

What impacts the cost to build a new home per square foot

When calculating residential construction costs per square foot there are many different things that can impact the total costs, meaning that there is no truly useful single average cost per square foot figure.


The location where you are building your new home will play a big part in the cost to build. Labor costs and materials costs vary depending on location. The climate can play a big part in the timings of construction and weather-related delays can add to the overall budget.

Land costs also vary widely by location with an acre of land ranging from as little as $3,000 in some rural areas of certain states to well over $1 million in New York City. In 2020 the average price for 22,000 square feet of land (half an acre), zoned for residential development, was approximately $90,000 according to the National Association of Home Builders. This works out at about $4 per square foot.

All this together means that the price per sqft to build a house changes a lot by region.

Average costs by city

According to Cummings the typical range per square foot, to build a single-family detached, medium quality house in 2021 are:

  • Las Vegas - $116 - $223
  • Atlanta - $195 - $234
  • Chicago - $294 - $343
  • New York - $330 - $396

Average costs by region

The US Census Bureau has figures for the average cost per square foot to build a home by region, which also takes into account rural areas, unlike the figures above.

  • South - $110 per square foot
  • Midwest - $129 per square foot
  • West - $158 per square foot
  • Northeast - $155 per square foot

Style of house

The style of house you choose to build will have a big impact on the cost per square foot. If you choose from a home builders' standard catalog of house plans, with standard square footage, you should be able to get an affordable home.

However, if you are looking for a semi-custom home or even a fully custom home expect to pay a much higher total cost for your dream home.

If you are looking for affordable housing options for your new house there are several styles that can save you money:

  • A pole barn house is based on a construction method for barns, using steel or wooden posts for the structure. They are quicker to build than traditional wood-frame houses and use fewer materials, making them a more affordable choice.
  • Shipping container homes are becoming increasingly fashionable as a cheaper way to build a custom house. Second-hand shipping containers can be purchased for a few thousand dollars each and can be put together to create houses of any size.
  • Tiny homes are another great way to save money, as smaller houses use fewer building materials and require less energy to live in.
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Size of house

While the cost to build a house per square foot won't necessarily increase with larger houses, the overall cost of the house will go up the bigger the house. More building materials are required and it will take longer to construct, pushing up the final price.

Number of stories

The number of stories in your home has an impact on the price per square foot, with single-story ranch houses and bungalows often working out as more expensive per square foot than two-story homes, as more land, larger foundation, and more roof area is required for the same amount of living space in a single-story home.


When building your dream home there are many extras you can include that will push up the price per square foot depending on your taste. If you add a swimming pool or large deck that will cost you more. A swimming pool costs between $35,000 - $100,000 and a deck will set you back at around $25 per square foot.

Adding a finished basement to your home will give you more square footage but will also increase the costs, and choosing energy-efficient materials will be an additional cost.

One advantage of choosing energy-efficient appliances and major systems is that you will save money in the long term with smaller utility bills for electricity, water, and gas.

Level of finish

One of the areas where the cost per square foot can vary a lot is with the interior and exterior finishes and most housebuilders have various levels of finish for their homes, from basic to luxury homes, with most homeowners choosing one of the middle options.

Normally people pay between $50,000 to $175,000 for the interior finishes of their house but if you are building a luxury custom house with marble or granite countertops, oak floorboards, and high-end fittings you can expect to pay even more than that.

Calculating residential construction cost per square foot

Because of all the factors mentioned it's tricky to break down the cost per sq ft to build a house but below we have outlined the key construction costs per square feet for a standard-built 2,000 square foot home, thanks to HomeGuide. Please note these figures are excluding land costs

Plans and permits

Before you can start work on building your dream home you need a clear architectural plan, and once that is ready it's vital to get the appropriate building permits. Costs to organize the utility companies to hook up your house are also included here and in total this will be around 2.1% of your total construction costs.

Cost per square foot: $2.61

Site work

Assuming your plot of land doesn't require much preparation work you will still need to excavate soil for the foundation. We have also included the final cleanup of the site and property in this section and altogether this accounts for around 1.6% of the building costs.

Cost per square foot: $2


For a standard foundation without a basement, you can expect 3.7% of your budget to be spent here.

Cost per square foot: $4.63

Framing and roofing

For a standard wood-framed house you can expect to spend around 24.4% of your budget on framing, roofing, exterior doors and windows, rough hardware, as well as all the associated lumber and carpentry costs.

Cost per square foot: $30.52

Insulation, walls, and floors

In this category, we cover the insulation, hanging drywall, laying flooring, and fitting carpets, which will be around 11.4% of your total cost.

Cost per square foot: $14.26

Interior finishes

The interior finishing is one of the more expensive areas in your house costs, but includes many different elements. As a result, it accounts for 16.3% of your home costs.

  • Brick hearth and veneer and fireplaces
  • Carpentry for cabinets
  • Countertops
  • Painting and decorating
  • Installing baths, sinks, and showers
  • Appliances
  • All lighting fixtures and fittings
  • Bathroom fixtures and fittings
Cost per square foot: $20.41

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Major systems

Installing all your major systems like your plumbing, wiring, sewers, and HVAC systems can be costly and can account for around 13.4% of the total construction cost.

Cost per square foot: $16.76

Exterior work

This section includes exterior finishes like stucco work, as well as installing driveways and garden paths and any garage doors. This accounts for 9.2% of the total construction costs.

Cost per square foot: $11.50

Contractor's fees

While it might seem like a high cost, using a reliable contractor, like Fortress Home, will save you time and money in the long run.

This section covers the contractor's fee and any insurance costs, and payroll tax. This accounts for around 17.3% of the total building costs.

Cost per square foot: $21.63

Frequently Asked Questions

What's the average cost per square foot to build a house in 2021?

With so many factors affecting the cost of house building in 2021, including the location, type of house, and size of house, it's very hard to give a single accurate average figure for residential construction cost per square foot when building your own home. However, most people agree that a standard single-family home should generally cost between $100 - $200 per square foot.

If you are looking at a more high-end or custom house you can expect to pay around $400 - $500 per square foot or even higher, depending on the quality of materials you use.

How much does it cost to build a 2500 sq foot house?

While the size of new houses is decreasing slightly, a 2,500 square foot house is quite a standard size for a single-family home in 2021. Depending on the style of house and finish you can expect to pay between $250,000 and $500,000 to build a house this size.

However, if you are planning to build a high-end, modern custom home you could end up paying around $1 million for a 2,500 square foot home.

How do you calculate residential construction costs?

When you are calculating home building costs you need to take several factors into consideration. These include:

  • The size of the house
  • The style of house
  • The layout and floorplan
  • The standard of finish and materials
  • The location of the property

Once your general contractor has this information they will use it to calculate the total construction cost which is made up of:

  • Building costs
  • Material costs
  • Labor costs

What is the most expensive part of building a house?

When building a typical single-family home there are a couple of items that can top the bill. If you don't have your own land and live in a city or state with high land prices the plot of land for your home construction might end up being the most expensive part of your home building costs.

If you happen to buy an unfinished piece of land that's not well connected to local utilities, the finished lot cost of connecting to the local power and water systems can also push the costs up high.

However, if you are lucky enough to live in a location with lower land prices, have found a reasonably finished lot, or already own your own land it's likely that the framing will be the single most expensive item on your housebuilding list.

If you are building a modern custom home with large expanses of glass walls, windows, and doors, the cost of the custom units and installation could end up topping the list of construction costs.

How much per square foot to build a house in Chicago?

If you want to build your dream home in Chicago, you need to speak with expert house builders who will give you an accurate and guaranteed budget for your construction costs. At Fortress Home we are experts on building custom houses and giving you a fair and accurate price which we will stick to. Contact us now for a free consultation: +773-770-8607 or [email protected] today.

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