The average cost to build a home in Michigan is $225,000 to $265,000, or $90 to $150 per square foot. But that cost varies considerably by location—and unpredictable materials and labor costs in recent years could drive the cost up.
Building your own house is the ultimate homeowner’s dream. Not only do you have full control over the style, size, and functionality of your home, but you’re making a major investment in your future. But before you break ground on your forever home in Detroit or that lake house in Holland, it’s important to calculate construction costs.
That math can get complicated. That’s why Jerry
, the #1 rated insurance app
for drivers and homeowners
, has created a guide to the costs of building a house in Michigan. From materials and labor to costs by style and city, we’ve got you covered with all the essential information about home construction costs in the Great Lakes State. RECOMMENDEDNo spam or unwanted phone calls · No long forms
Average cost to build a house in Michigan
The average cost to build a home in Michigan is $90 to $150 per square foot, or between $225,000 and $265,000. However, rapidly fluctuating costs for both materials and labor in the past two years have made these averages unpredictable—and the overall cost could end up being much higher.
Why? Simply put, supply chain and labor shortages during the COVID-19 pandemic have driven up the cost of building a home in Michigan. As an example, let’s take a look at recent changes in the cost of lumber nationwide.
As recently as 2019, the cost of lumber in the US
was about $350 per 1,000 board feet. But that changed abruptly when the pandemic impacted labor and shipping costs. According to the National Association of Home Builders (NAHB)
, the cost of lumber is now between $1,200 and $1,400 per 1,000 board feet. In other words, the cost of lumber—which can make up 60-70% of the total cost of materials to build a house—has gone up 271%!
With that in mind, let’s take a closer look at the costs that go into building a home. Keep in mind that we’re considering national averages that won’t necessarily account for all the rapidly shifting local costs in 2022.
Materials
The biggest expense in building a home is the material you need to buy. Below is a breakdown of the average cost for the essential materials required to build any new home.
| Average cost by square foot | Average total cost for a 2,000 square foot home |
|---|
| $15 to $30 per square foot | |
| $4.25 to $6.25 per square foot | |
| $3 to $22 per square foot | |
| $0.50 to $0.75 per square foot | |
| | |
| | |
| $0.65 to $6.50 per square foot | |
| $2 to $45 per square foot | |
| $3.60 to $21 per square foot | |
Note that some of these materials have a significant range in average price. Siding, for instance, can be relatively inexpensive if you go for metal or wood—but a brick or stone home will cost you some serious change. Likewise, the cost of flooring varies significantly based on the type and quality of the materials you use.
Labor
Unless you’ve got a full suite of expert construction skills (and about a hundred hands!), you’ll need to hire some professional assistance to build a house in Michigan. Labor costs make up the other major part of your home-building expenses.
A construction manager, who will plan, budget, and supervise the construction of your home, will charge you a construction management fee based on the overall cost of the project. Typically, that fee is between 5% and 15% of the total cost—so the rising cost of building materials will also impact the amount you need to pay the contractor.
But that’s not taking into account the labor costs for framing, roofing, electrical and plumbing installation, HVAC installation, and other core construction tasks. Add hourly rates between $16 and $35 for each of those tasks to the cost of materials—and keep in mind that you’ll need to hire a team of workers—and you’re looking at a hefty added cost.
All in all, the cost of labor typically works out to $34 per square foot, or 39% of the total project cost. For an average 2,000 square foot home, you’ll want to budget at least $6,800 for labor costs.
Pro Tip Be sure to check permits
and read customer reviews before you hire any contractors or building companies.
MORE: What’s the difference between a builder and general contractor?
Non-construction costs
The actual construction is only one element of the overall cost to build a house in Michigan. You’ll also need to pay for land to build on, permits to authorize construction, a driveway, interior finishes, and eventually furnishings for your new home.
Each of those costs varies considerably depending on your location, the scope of your project, and the size of your dreams—but here are some averages you should take into account:
Average price of farmland converted for residential use: $2,220 per acre (Upper Peninsula) to $10,230 per acre (Southern Lower Peninsula)
Average price of land statewide: $23,765 per acre
Building permits: $1,000 to $2,000
Driveway: $2,000 to $6,000
Interior finishes: $65,000 to $75,000
Furnishing: $15,000 to $75,000
Like the other costs associated with building a house in Michigan, these non-construction expenses can vary a lot depending on your location and the materials you use—and they’ll add up quickly.
Check your local building codes and permit fee schedule to estimate the cost of permits, and search for local land listings to see if you’ve got affordable options in your area. Making a budget for interior finishes and furnishings can help you create an accurate estimate of your overall costs in advance.
MORE: Home insurance for new construction
Cost to build a house in Michigan by style
Of course, the exact cost of your Michigan build depends on what type of house you’re building. Three of the most popular home styles in Michigan are bungalows, Victorian homes, and ranch houses. Here’s how the average cost of each style compares:
| Average cost per square foot | Average overall cost for a 2,000 square foot house |
|---|
| | |
| | |
| | |
Between these three styles, a bungalow is the most affordable style of house to build in Michigan—but compare other options, and keep in mind that the size and location of your house may be bigger determinants of the overall cost.
MORE: Can you negotiate upgrades on new construction homes?
Cost to build a house in Michigan by city
Where you are in Michigan will play a big role in how much it costs to build a house. Building permits, land costs, and market fluctuations all contribute to higher construction costs in some areas—particularly in the southern part of the state. Here’s what you’ll pay to build a house in some of Michigan’s biggest cities:
Ann Arbor: $120 per square foot
Detroit: $153 per square foot
Flint: $105 per square foot
Grand Rapids: $350 per square foot
Lansing: $125 per square foot
Sterling Heights: $114 per square foot
Warren: $116 per square foot
The cheapest city in Michigan to build a house in is Flint, while the most expensive Michigan city for home builders is Grand Rapids. This reflects overall trends in housing costs in both areas, with a median home value of $90,000 in Flint compared to $235,000 in Grand Rapids.
MORE: How to decipher home insurance quotes
Is it worth it to build a house in Michigan?
The bottom line: it’s more expensive to build a house in Michigan than to buy one.
The average home value in Michigan is $222,659, according to Zillow
. That’s solidly below the average estimated cost to build a house, which varies between $225,000 and $265,000. Add to that the explosion of building costs in recent years, and buying a house is clearly the economically safe choice. However, building a house still has its rewards. When you build your own house, you can create the home of your dreams and make an investment with the potential to pay off considerably in the future.
MORE: Home renovation vs. remodel: what’s the difference?
How to save money when building a home in Michigan
If your heart’s set on building a house in Michigan, here are some smart tips to save money in the process:
Put your DIY skills to the test: Labor makes up a significant portion of the cost of building a house—you could save 5-15% of the cost by doing some tasks, like interior finishes, on your own.
Build a modular home: Most new construction homes are stick-built (i.e., built from scratch), but a modular home typically costs 10-20% less.
Maintain a good credit score: Unless you’ve got a boatload of cash sitting around, you’ll probably need to take out a personal loan to build your house. A good credit score (e.g., above 700) will keep your interest rates and overall costs low.
Balance savings with resale value: Remember, your new house isn’t just a home—it’s also an investment. Cutting upfront costs will save you money in the moment, but opting for high quality in key areas increases the house’s resale value, saving you cash in the long run.
Opt for energy-efficient materials: Solar panels, recycled steel, and energy-efficient appliances can translate into long-term servings.
MORE: How to bundle home and auto insurance to save money
How to easily find the home insurance in Michigan
We’ve covered a lot of the core costs of building a house in Michigan, but don’t forget one essential expense for homeowners—insurance
! Finding the right policy at the right price can be a major hassle—especially if you're already dealing with building a house! Put your home insurance on autopilot with Jerry
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