Budgeting for home construction costs or a major reconstruction project isn’t easy. Nationwide “average” construction costs are a myth, as too many variables influence your local area construction costs. Unless you’re willing to do hours of research, one of the best ways to budget for home construction is to let your home architect do the calculations.

Home Architect Fees

Home architect fees average between 5 to 15 percent of total home construction costs. If you don’t have an idea of average construction costs, you can’t budget for architect fees. Home architects should be able to give you an estimate based on average local home construction costs.

Determining Average Home Construction Costs

People often budget for home construction or remodeling by calculating a price per square foot. In theory, it should be simple enough to determine average construction costs by finding the price of similar sized homes, subtracting the cost of the land (leaving you with just the cost of the home) and dividing this number by the home’s square footage.

In practice, budgeting for home construction by square footage is full of pitfalls. With the multitude of building materials available, it’s unlikely any two homes use exactly the same materials (with the exception of “themed” neighborhoods).

A two story home and a ranch house may have identical square footage, but differences in home style mean the price of each house could be very different. Rectangular houses have lower square footage prices than other house shapes, because they are easier to build. And smaller houses tend to have more expensive average construction costs per square foot because it’s easier to get discounts on larger construction orders.

In addition to these problems, exactly how is square footage generated? The number of square feet in a home varies depending on whether or not you measure internal or external space. For most people, home construction costs that are broken down into square footage are often misleading.

Home Architects and Budgeting for Home Construction

Rather than budget for home construction based upon material and labor costs, it’s better to budget based on what you can afford. A home architect can design a room–or indeed entire home–based on your budget. If your budget is unrealistic, the home architect will recognize this and let you know.

The total home construction cost includes multiple prices for materials you, as the homeowner, may not even consider. Only when your home architect completes the design process will you have an itemized budget for your project.

Budgeting for Hidden Costs

Once you have a budget for your construction project, add an additional 5 to 20 percent onto the budget for unforeseen construction costs. The list of problems that can beset a home construction project are staggering. Generally speaking, the larger the project, the more you should budget for unforeseen expenses.

New home construction is often a long-term goal. If you’re calculating construction budgets for projects that may not be completed for several years, be sure to take inflation into account. Average construction costs rise by approximately 6 percent a year. If you’re planning to build a new home in five years and don’t factor in inflation, you could be left with a shortfall when the time comes to pay the new home construction costs.