The cost of building a home has risen significantly, with construction expenses making up 64.4% of the average home price in 2024—the highest percentage on record!
### Breakdown of Construction Costs
- **Site Work:** Preparing the lot, securing permits, and installing utilities account for 7.6% of the total cost, averaging $32,719.
- **Foundation:** Excavation, concrete work, retaining walls, and backfill cost $44,748, 10.5% of the total.
- **Framing:** Lumber and structural framing are among the most expensive components, totaling $70,000 (16.6%).
- **Exterior Finishes:** Siding, brickwork, and roofing total $57,510 (13.4%).
- **Major Systems:** Plumbing, electrical, HVAC, windows, and doors account for $82,319 (19.2%).
- **Interior Finishes:** Cabinets, countertops, drywall, flooring, paint, lighting, and appliances cost over $103,000 (24.1%).
- **Landscaping & Outdoor Structures:** Decks, patios, and porches add approximately $27,710 (6.5%).
### Total Cost to Build a Home in 2024
Adding up all these expenses, the average cost to construct a new home in 2024 was $428,215. However, this is just one component of the final home price.
### Additional Costs & Profit
Beyond construction costs, there are several other expenses to consider:
- **Lot Purchase:** $91,057
- **Financing:** $10,220
- **Overhead & General Expenses:** $38,248
- **Marketing:** $5,633
- **Sales Commissions:** $18,995
Finally, homebuilders add their profit margin, which averaged 11% in 2024 and amounted to $72,971 (up from 10.1% in 2022).
### Final Sale Price
When all costs are factored in, the average new home sold for $665,298 in 2024. The cost of building a home has risen significantly, with construction expenses making up 64.4% of the average home price in 2024—the highest percentage on record!
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