The Average Cost to Build a House in Tennessee: What to Expect

Tennessee is the state famed for the origin of the tow truck, and it offers numerous well-known cities in which to reside. Tennessee is also popular for its country music events as well as its classic blues culture. If you enjoy bluegrass, country, or rock ‘n’ roll, you’ll be pleased to learn that the average costs of living in Tennessee are rather affordable.

Since it is a southern state, it is one of the most expensive areas to build a house. Building a house in the southern United States will cost you roughly $110.19 per square foot.

In this article, we’ll look at the various aspects of building a house in Tennessee. We will strive to give you a home prices breakdown in TN; the permit and building fees, as well as the average cost to build a house in Tennessee.

Understanding the Basics of Home Construction Costs

Home construction costs encompass everything from land and site work to design and plan costs, as well as actual construction and material expenses. When building a house in Tennessee, it’s crucial to understand that the overall construction cost can vary significantly based on several factors. These include the location of the property, the materials used, labor costs, and additional expenses such as permits and inspections.

For instance, material expenses can account for a substantial portion of your construction budget, and the quality of materials chosen can greatly influence the final cost. Similarly, labor costs can fluctuate depending on the number of workers and their skill levels. By considering all these factors, you can get a realistic estimate of the overall cost of your home construction project in Tennessee.

Land Costs in Tennessee

An acre of land in Tennessee was valued at $14,400 on average, somewhat more than the $12,100 per acre in the lower 48 states. Tennessee, like other states, derived a considerable percentage of its value from developed land, while accounting for less than 10% of the state’s territory.

The average acre of Tennessee land is worth $14,400 statewide, but it all depends on location. According to FindAnyAnswer.com, the average sale price for a 251,911-square-foot property in one of Unicoi County’s finest areas is $59,408.

Tired of paying property taxes on unused land? Nexus Homebuyers purchases land in Nashville and land in Knoxville, offering quick closings and cash offers without real estate agent fees.

Permit Costs to Build a House in Tennessee

In Tennessee, obtaining a building permit is usually required if you enlarge, build, remodel, repair, relocate, or demolish a structure. Interior renovation and the installation of minor ancillary constructions such as decks and detached garages are included.

If the work goes beyond the most basic repairs, electrical, mechanical, and plumbing work will also need a construction permit. Painting and carpeting are common examples of finishing work that does not need a construction permit.

Building permits in Tennessee are typically given by the local Building and Codes office in the city where your project will be located. Permits are issued by the county office in unincorporated regions instead. In any case, the procedure is nearly the same.

Cost Breakdown for Residential Building Permits

Note:

When the slab and footing are cast separately, a slab other than Monolith Pour inspection is necessary new construction requires an HVAC and Plumbing Inspection.\ ***The construction cost cannot be less than $60.57 per heated square foot.

Building Costs to Build a House in Tennessee

The real construction prices of building a house in Tennessee are determined by a variety of factors. The decisions taken during or before construction have an impact on the cost of building a house.

1. The Cost of Building Materials

The most crucial component in deciding the material cost of your house will be the materials you choose. The greater the price of materials, the higher the cost.

For example, you will need to employ timber, concrete, and other materials. Your expenses will largely be determined by the size of your house and the quality of materials used. Material prices often account for 30% to 50% of your total budget.

2. Labor Costs

The labor expenses will be determined by the number of workers you employ and their skill level. If you want to complete your job in a shorter time, you must use more labor than normal. This will dramatically boost your labor costs.

Managing labor costs is a difficult task in the construction industry. They have the potential to become unpleasant if not adequately handled. The average hourly wage for a construction worker in Tennessee is $15.32. You may strike a decent balance by adjusting the quantity of time required and the workforce you hire.

When planning your new house, don’t forget to budget for interior finishes, painting, electrical work, plumbing, and other expenses.

3. Finishing Costs

The level of finish you choose can have a significant impact on the amount you pay. On top of other building expenditures, base-level finishings start at an average price of $90 per square foot.

However, if you add marble countertops, wood flooring, high-end appliances, and chandeliers, the price might increase. A two-story home may cost more than a one-story home if you want a second level.

Midrange homes are somewhat finer than basic residences and cost significantly more as a result. Expect to pay an extra $100 to $120 per square foot for construction.

4. Fees for Architecture and Design

In Tennessee, architects charge an average of $6,565 for labor and supplies, while contractors charge between $6,200 and $7,750 for their services. This is more than the $5,665 national average (based on HomeAdvisor cost estimates).

The above-mentioned sum comprises the typical labor cost for hiring an architect, material costs and equipment, as well as any project expenditures and cleanup fees. Furthermore, interior design services range in price from $4,201 to $6,468 per hour, or around $50 to $200.

5. Other Critical Factors

If you have a good site, you won’t have to spend too much money, but occasionally, sites are in poor condition and require significant investment to adapt them for the development process.
The cost of interior and exterior finishing is determined by the grade of materials used to adorn your home. 

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Factors Affecting Construction Costs in Tennessee

Several factors can affect construction costs in Tennessee, making it essential to plan carefully and budget accordingly. Here are some key elements to consider:

• Location: Construction costs can vary depending on the location. Cities like Nashville and Memphis tend to be more expensive than rural areas due to higher demand and labor costs.
• Materials: The type and quality of materials used can significantly impact construction costs. High-end materials like granite countertops and hardwood floors will increase the overall cost compared to more standard options.
• Labor: Labor costs can vary depending on the location and the skill level of the workers. Urban areas typically have higher labor costs than rural regions.
• Design and Architecture: The design and architecture of the house can also impact construction costs. Custom-designed homes with unique features are generally more expensive to build than standard production homes.
• Permits and Inspections: The cost of permits and inspections can add to the overall construction cost. It’s important to factor these into your budget to avoid any surprises.

By understanding these factors, you can better manage your construction budget and make informed decisions throughout the building process.

Financing Your Home Construction in Tennessee

Financing a home construction project in Tennessee can be complex, but there are several options available to help you manage the costs involved. Whether you’re building a custom home or a standard production house, securing the right financing is crucial to ensure your project stays on track.

1. Home Construction Loans

Home construction loans are specifically designed to provide the necessary funds for building a new home. These loans typically offer a lump sum of money to cover construction costs and have a shorter term than traditional mortgages. Here are some common types of home construction loans:

• Construction-to-Permanent Loans: These loans provide financing for the construction phase and then convert to a permanent mortgage once the house is complete. This option simplifies the financing process by combining two loans into one.
• Construction-Only Loans: These loans provide financing for the construction phase only and require a separate loan for the permanent mortgage. This option can be more flexible but may involve more paperwork and higher overall costs.
• Owner-Builder Loans: These loans allow the homeowner to act as the general contractor and manage the construction process themselves. This can save money on labor costs but requires significant knowledge and experience in construction management.

2. Alternative Financing Options

In addition to home construction loans, there are several alternative financing options available to help you fund your construction project:

• Personal Loans: Personal loans can be used to finance a portion of the construction costs. However, they may have higher interest rates compared to home construction loans.
• Home Equity Loans: If you have equity in your existing home, you can use a home equity loan to finance part of the construction costs. This option can offer lower interest rates but requires you to have sufficient equity.
• Government-Backed Loans: Programs like FHA and VA loans can provide financing for home construction projects. These loans often have specific requirements and restrictions but can be a good option for eligible borrowers.

Carefully consider all financing options and choose the one that best fits your needs and budget. By securing the right financing, you can ensure your home construction project in Tennessee proceeds smoothly and stays within your financial plan.

Average Cost to Build a House in Tennessee per Square Foot

According to the most recent statistics available from the National Association of Home Builders, the average cost to build a (single-family) home is between $360k- 700k or $180-350 per square foot. Foundation costs generally account for 10-15% of the total construction budget. The overall construction prices per square foot have risen over time:

Nationally, the home building costs per square foot range from $100 to $200. However, prices might vary by area. Building a new house in the South is far less expensive than building in the West or Northeast.

A 2,000-square-foot new home construction costs between $360,000 and $700,000 on average. Since new-construction homes are often priced based on square footage, a larger home will cost more.

Here are three sample house construction projects as a glimpse of the cost of home construction in the Tennessee region for projects of varying square footage. Plumbing and electrical are included in all of these prices.

If you’d like to learn more about the Tennessee real estate market, you can check the home prices breakdown in TN.

FAQ’s: Building a House in Tennessee

Q: Is it cheaper to build or buy a home in Tennessee?

A: With the current median sale price in Tennessee, buying an existing home is typically more affordable than building. Total construction costs, including skilled labor and necessary permits, usually exceed the final price of comparable homes.

Q: What is the most expensive part of building a house?

A: Site preparation and structural elements comprise the largest portion of the total project cost. Premium materials, plumbing fixtures, and sewer lines or septic system installation can significantly impact the upfront costs.

Q: What is the cheapest way to build a house in Tennessee?

A: Working with a reputable builder who focuses on affordable options while maintaining quality is key. Avoiding premium materials and carefully planning the total cost with home builders can reduce expenses.

Q: Do you pay taxes on land in Tennessee?

A: Yes, the Volunteer State requires property taxes on land ownership. However, tax rates vary by location, with major cities typically having higher rates than rural areas.

Q: Is property expensive in Tennessee?

A: Land prices in Tennessee remain relatively affordable compared to other states. The final price depends on location, with natural beauty and proximity to major cities commanding premium rates.

Q: Where is the cheapest place to buy land in TN?

A: Rural areas away from major cities offer the most affordable land prices. Counties in western Tennessee typically feature lower prices, though closing costs and site preparation should be considered.

Q: Are land taxes high in Tennessee?

A: Tennessee offers relatively moderate land taxes compared to other states. Prices vary by county, but the Volunteer State generally maintains competitive rates for property owners.

Q: How much does a building permit cost in TN?

A: Building permit costs vary by county and project size. To start construction, expect to pay based on the total project cost, with professionals involved in the process affecting the final permit price.

Final Takeaways

Due to nationwide variations in material availability, the overall cost of constructing a new home in Tennessee might average $130.97 per square foot or approximately $327,425 for a typical-sized single-family home. This is more expensive than the current national average of $287,466.

However, pricing may vary depending on factors like the grade of materials utilized, square footage, location, and the property tax in TN. In addition, there are expenses for site fees, house plans, permit fees, and other special elements, as well as foundation, framing, plumbing, flooring, and roofing.

Hiring a skilled contractor initially can help you save money. Builders understand how different design and finish choices affect the final cost, and they will work with you to keep your dream home within your budget.

If you’re wondering how you can sell your house fast in Nashville, we’re Knoxville home buyers and purchase homes all over Middle and East TN. We take the stress and hassle out of selling your home. Contact us today and let us sell your house fast and easy!