For buyers in Michigan, building a house is certainly one way to get around the low inventory of available homes. Even as the hot seller’s market has cooled, top HomeLight agents are reporting that inventory is staying low as homeowners in 2023 pull back from selling. But according to Bethany Brokaw — a real estate agent who has been selling homes in Genesee County for over a decade — the average cost to build a house in Michigan “would be deemed quite expensive right now, especially compared to three years ago.” Brokaw says that, on the low end, buyers can expect to pay $150 per square foot to build a house, “and I’m talking no basement, very small lot, and builder-grade finishes,” she explains. “And your higher end can be anywhere between $300 to $700 per square foot, depending on your location, if you have a water view, how large your lot is, and which finishes you choose.”
On average, though, to build a home in Michigan with desirable finishes like granite countertops, hardwood floors, and other basic upgrades, “buyers are definitely looking at around $250 per square foot,” says Brokaw. To build a 1,500 square foot home, this clocks out at a cost of $375,000. Meanwhile, the median price per square foot of existing homes in Genesee County is just $124 per square foot — or $186,000 for 1,500 square feet. When it comes to purchasing a home, there are plenty of reasons why buyers might have their eye on a new construction property rather than an existing house. There’s an undeniable appeal to being the first one to live in a brand new home, and if you’re buying early enough to be involved in the building process, you can often make decisions about paint colors and upgrading materials to customize your home before you even move in. Of course, the cost of buying real estate is rarely so cut and dried. It may well be cheaper to buy a house than to build one, but it depends on everything from location to your personal preferences for fit and finish. Here is an at-a-glance look at the average costs of each phase of building in Michigan, but we will break it all down next: No matter which state you’re in, the steps involved in building a house will vary depending on whether you’re buying a tract home — which is when a builder has bought a large tract of land to divide into lots and build out several homes — or if you’re building a custom home. Keep in mind that the price ranges we’re providing are a general estimate. Your agent and, eventually, your builder can give you much more specific information on pricing! According to an April 2022 report by the National Association of Realtors, land sales rose 6% in 2021. Land sales for residential use were also up, accounting for 4% of all residential real estate sales in 2021. The USDA’s land values report for 2022 — which evaluates farmland real estate values — indicates that Michigan’s average value per acre was $5,850 in 2022, which is a 10.4% increase over 2021’s land value of $5,300 per acre. Now, if you’re looking to build a single family home in the suburbs, the price of farmland probably doesn’t seem relevant. But these numbers do provide a baseline for managing expectations, and working with an experienced real estate agent will help you fill in more specific pricing gaps based on your specific location and lot size needs. Foundation costs will vary depending on whether you’re pouring a slab or digging a basement, but a typical price range is between $4,000 and $13,500. Framing is when the sticks go up and a structure actually starts to take shape. Expect to pay between $14,000 and $32,000 for this phase of building a house in Michigan. Framing costs tend to vary due to both the size of the home and the complexity of its design — a one-story home with 2,000 square feet of living space will generally be less expensive to frame than a two-story home with the same square footage. Roofing doesn’t come cheap — whether you’re putting one on a new house or replacing the roof on an existing home. The costs of a new roof typically range from $6,550 to $11,900. Asphalt shingles are the most affordable roofing option, at around $1 to $3 per square foot, with tile roofing being more expensive, costing around $8 to $25 per square foot. Siding is another big variable: Are we talking vinyl, wood, brick, concrete, stone, stucco, or something else entirely? Siding costs range between $5,000 and $14,000, with vinyl or engineered wood siding typically costing between $3 and $12 per square foot. You guessed it — appliance pricing also varies widely. Depending on brand, functionality, finish, and so on, you’ll spend an average of $10,875 if the home does not come with any, but you can definitely drop up to $24,400 or more on high-end appliances. The installation of a new heating and cooling system could cost upwards of $12,500 depending on the size of your home. Plumbing can cost anywhere from $2,000 to $5,000 on average — not including fixtures like sinks and toilets. The cost to wire a house is, on average, between $500 and $2,300. Permits vary by state, city, and county, but they typically range from a few hundred dollars to a few thousand. In Michigan, permit costs to build single-family homes are based on the project’s calculated “total cost of construction.” Finishes and fixtures comprise everything from countertops to sinks, and lighting to flooring. Needless to say, pricing varies widely and depends heavily on your preferences. Average carpet installation costs can start at several hundred dollars and go up to $3,000, while hardwood flooring installation starts around $2,500 on up to $7,000. Laminate countertops tend to range from $790 to $1,626, while granite averages from $2,250 to $4,500. Depending on the size of your home and the quality of finishes, this can be a large portion of the cost to build a house in Michigan. Building a custom home usually comes with additional costs. Again, your agent can help you determine more accurate costs — these are average figures provided to give you an idea. Architect fees fall between 5% and 20% of the total project cost, according to HomeAdvisor. So, for the 1,500 square-foot home with a build cost of $375,000, that could mean anywhere from $18,750 to $75,000. Land surveys, which identify your property lines and land features, range between $375 and $745. If you’re buying a tract home, the land price will be rolled into the overall price to build a home. If you’re buying a lot on your own and then building a custom home, Brokaw says you can expect to pay between $20,000 and $50,000 to clear the land, run utilities, and put in a driveway. While going with a bare-bones building strategy can get you into a new construction home for less, cheaper isn’t always better. Shoddy build quality will inevitably lead to problems down the road — anything from a leaky roof to poor sound insulation can be a frustrating discovery when you’ve only been in your new home for a few months — and there’s value in creating a home you genuinely want, not just one you’re settling for. Alternative home building options can give you more for your money and offer valuable flexibility during the construction process. A tiny house is usually 600 square feet or less in size. They’re not ideal for large families, but building a tiny house can be faster and more affordable than a conventional home if a smaller space fits with your lifestyle. They can also be a great starter home option, especially as construction of starter homes (homes smaller than 1,400 square feet) has declined in Michigan by a staggering 24%-31% since 1980, according to researchers at Freddie Mac. On average, tiny homes cost between $30,000 and $60,000 to build. In Genesee County, Brokaw says tiny homes aren’t especially popular, but they’re increasingly on people’s radar. “We have a national builder who just came into this area and they would have, by far, the lowest cost houses,” says Brokaw. “But every single one of their houses have the exact same finishes inside — you can’t even pick your paint color, even if you’re willing to pay extra. Their prices are roughly $140 per square foot.” In Brokaw’s market, modular homes are not common — largely because deed restrictions and HOA regulations in the area call for site-built homes. That said, in general, modular homebuilding tends to cost between $180,000 and $360,000. Brokaw warns that between labor shortages and supply chain delays, building a new home in Genesee County right now can take seven to nine months for a tract home, or nine months up to two years for a custom-built home. However, she believes it’s still worth the time and money if you’re interested in building a new home. “It’s still a great thing for people to do. There’s peace of mind in knowing that every single thing in the house is new — it’s a wonderful thing,” Brokaw says. “It’s just something you need to be prepared for and think through, especially if you’re doing a custom product.” Brokaw encourages buyers to work closely with an agent who has experience with new construction homes and the homebuilding process “Ask how many new construction transactions they have; ask if they have personal experience with new construction,” urges Brokaw. “Ask if they’re familiar with the builders in the area and the different neighborhoods — different builders have different levels of quality.” Finally, Brokaw wants buyers to remember that a project like this requires patience, understanding, and flexibility — both with price and timing. “The timeframe you were quoted will probably not stick,” she cautions, “and you need to be prepared that your quoted price point could also change if the builder runs into problems, or if you decide you want to change or upgrade something along the way.” In short? No matter where you’re building, be patient, be realistic, and be sure to work with trusted professionals. Good luck!Building Phase
Average cost (2023)
Foundation
$9,046
Framing
$14,000 – $32,000
Roof
$6,550 – $11,900
Siding
$10,750
Appliances
$10,875
HVAC System
$7,000
Plumbing System
$4,080
Electrical System
$1,436
Building Permits
$1,420
Finishes and Fixtures
$42,000 – $175,000
Cost to build a house in Michigan in 2023 ($375,000)
Buying a plot of land ($5,850 per acre)
Foundation ($4,000 – $14,000)
Framing ($14,000 – $32,000)
Roof ($6,550 – $11,900)
Siding ($5,000 – $14,000)
Appliances ($10,875)
HVAC system ($12,500)
Plumbing system ($2,280 – $5,120)
Electrical system ($500 – $2,300)
Building permits (Variable)
Finishes and fixtures ($42,000 – $175,000)
Additional costs of building a custom house in Michigan
Hiring an architect ($18,750 – $75,000)
Land survey ($375 – $475)
Excavation and grading ($20,000 – $50,000)
More affordable options for building a home in Michigan
Tiny homes ($30,000 – $60,000)
Modular and prefabricated homes ($180,000 – $360,000)
The timeframe you were quoted will probably not stick, and you need to be prepared that your quoted price point could also change if the builder runs into problems, or if you decide you want to change or upgrade something along the way.
It’s pricey, but it’s worth it to build a home in Michigan
