Estimating the cost of a new house
Building a house involves much more than the price per square foot quoted by a builder. This calculator puts the main pieces together: construction (hard) costs, soft costs, a contingency reserve and the land.
The calculation
- Hard costs = living area × cost per sq ft + garage area × cost per sq ft × garage percentage
- Soft costs = hard costs × soft cost percentage
- Contingency = (hard + soft costs) × contingency percentage
- Cost to build = hard + soft costs + contingency
- Land = land price × (1 + purchase cost percentage)
- Total = cost to build + land
Worked example
A 2,000 sq ft house at $200 per sq ft, with a 400 sq ft garage at 50% of that rate, 10% soft costs, 10% contingency and an $80,000 lot with 2% closing costs:
| Item | Amount |
|---|---|
| Hard costs | $440,000 |
| Soft costs | $44,000 |
| Contingency | $48,400 |
| Cost to build | $532,400 |
| Land with closing costs | $81,600 |
| Total project | $614,000 |
| All-in cost per sq ft of living area | $266 |
The headline $200 per sq ft becomes $266 once soft costs, the garage and the contingency are included.
What drives the cost per square foot
- Location: labor and material costs vary widely by region and between urban and rural areas.
- Finish level: a builder-grade home and a custom home with premium finishes can differ by a factor of two or more.
- Shape and height: a simple rectangle is cheaper per square foot than a complex footprint; a two-story house needs less roof and foundation per square foot of living area.
- Site: slopes, rock, poor soils, long driveways and well or septic systems add costs that are not in a per-square-foot price.
What soft costs include
Architect and engineering fees, surveys and soil tests, building permits and impact fees, utility connections, builder’s risk insurance and construction loan interest. Together they often add 10 to 20% to the hard costs.
Contingency
Unexpected costs are almost certain: price increases, design changes, hidden site conditions. A 10% reserve is common for a straightforward build with a fixed-price contract, and 15 to 20% for custom designs or owner-built projects.
Use this calculator for early budgeting. A detailed estimate from a builder, based on plans and a site visit, is the only reliable basis for financing and contracts.