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December 18, 2023

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    Indiana is a popular location to build a home, regardless of the size. Considered one the midwest’s best places to raise a family, Indiana has a lot to offer. Plentiful land is available within a few minutes of most larger cities like Indianapolis and Columbus. Indiana offers farmland as well as urban living, making Indiana a very diversely populated state.

    Today we will investigate the costs of building a home in Indiana and suggest a few ideas to consider before building. 

    • Smaller homes can typically be constructed for between 100k and 140k, while larger, upscale homes will often range from about 140k to 220k.
    • The median home price per square foot to build a 2000 square foot home in Indiana as of 2020 was about 130.00 per square foot.
    • Most larger tracts of land in Indiana (5+ acres) suitable for building will sell for between 18k-32k dollars per acre.
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    The Average Cost to Build a House in Indiana 

    The average home building cost generally falls into two categories. Smaller homes can typically be constructed for between 100k and 140k, while larger, upscale homes will often range from about 140k to 220k. Check out this article on Koopy.com for some great tips on how to save money when building a house.

    Normally, the more square footage constructed, the lower the overall cost per square foot should be. However, larger homes tend to be more luxurious than smaller homes, using more elaborate materials, raising the cost per square foot. 

    Cost Per Square Foot to Build Home In Indiana

    The median home price per square foot to build a 2000 square foot home in Indiana as of 2020 was about 130.00 per square foot. This is in contrast to purchasing a 2000 square foot home, which as of 2020 was about 158.00 per square foot.

    However, due to the exploding real estate market in 2021, both of these figures have risen approximately 10%. The pandemic caused a huge shortage in building materials, so since demand is extremely high, new home building prices have risen over 20% in some parts of Indiana. 

    Some of the increase can also be attributed to the lack of skilled labor. Since the demand has risen sharply now that builders have gone back to work, it is estimated that the demand for housing will continue to rise through the remainder of 2021. Some predict that by 2023 these costs will settle back down to pre-pandemic levels. 

    What Is the Least Expensive Type Of Home To Build Per Square Foot In Indiana?

    Generally speaking, the least expensive homes to build in Indiana are in the 120k to 150k range. This will vary of course by region. Here is a list of a few metro areas and the median price per square foot to build a new 2000 square foot home, but does not represent the cost of the land:

    • Bloomington 142.00/sq. ft.
    • Goshen 112.00/sq. ft.
    • Indianapolis 144.00/sq. ft.
    • Fort Wayne 125.00/sq. ft.
    • Bloomington 132.00/sq. ft.
    • Gary 96.00/sq. Ft.

    What Constitutes the Full Cost to Build a House in Indiana?

    When breaking down the total cost of ownership of building a new home in Indiana, the main elements will be the land, the materials, and the labor. Each of these on its own can be managed to keep the overall cost down, but it is very important to make changes cautiously. For example, paying the full price for labor to install a cheap product found on sale can actually cost more in the end.

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    In real estate, location is the single most important factor that will affect the overall cost. Land should be considered for its use, so new home builders should do their homework. Are utilities available? Is public water available at the street, or does the property need a well? Will the property require a septic system or is public sewer available? Does the property have something weird, like a flood plain or easement? All of these factors will significantly affect the overall cost of the land.

    What Is the Price of Land In Indiana?

    Most larger tracts of land in Indiana (5+ acres) suitable for building will sell for between 18k-32k dollars per acre. This will generally get a piece of land with access to utilities such as public water, sewer and electricity. Smaller tracts, such as those found in starter subdivisions, will typically be closer to 25k-40k per lot, which will usually be no more than a quarter acre, but it will vary from subdivision to subdivision. These lots will generally have all available utilities, be close to shopping, and perhaps even public transportation.

    Examples Of Building Costs In Indiana

    In most situations the foundation of a home represents more labor than materials. Foundations generally incorporate site preparation, concrete, and cement blocks, which by comparison, are fairly inexpensive. These materials have matured, meaning the cost has not risen significantly in many years, costing about 5% of the total cost to build a home. For example, the foundation on a 2000 square foot, one story rancher will cost about 10k dollars. It should be noted that the foundation for a two story home will also be in the 10k dollar range.

    Finishes are a component of a home greatly subject to personal taste, but as a rule the cost is usually about 3-5% to the total. As homes are designed more elaborately they tend to include higher grade materials such as trim, cabinetry, and flooring. Most builders will simply allot a budget for these features, as choosing one material over another can significantly affect the overall cost to build.

    The roof of a home is arguably the most important feature of a home. In Indiana, the price to install a roof is in line with the national average, which is currently 8k to 10k, and generally represents about 8% of the total cost to build. This number will vary widely of course, depending on the type of roof.

    The least expensive option is often metal or fiberglass panels, which can often be installed for $1.00-$3.00 per square foot. The most expensive, often tile or slate, will be closer to $10.00 per square foot. Most homes will have a fiberglass/asphalt roof, which will often be in the $3.50-$5.50 per square foot range.

    Read also: Indiana Solar Incentives

    What Are the Labor Costs to Build a Home In Indiana? 

    General labor

    In most areas of Indiana, a three man unskilled team will cost about 130.00 per hour. These teams are very useful for general labor like journeyman helpers and site clean up. This price should include worker’s compensation insurance, but likely will not include liability insurance.

    Skilled Labor

    Here is an idea of typical labor costs for each of these skills in Indiana:

    • Journeyman Carpenter $60.00-$85.00/hr
    • Apprentice Carpenter $40.00-$55.00/hr
    • Bricklayers $550.00-$600.00/1000
    • Finish Carpenter $55.00-$70.00/hr

    Hidden Costs

    Hidden costs are those generally small amounts that can add up to impact the overall budget. These will generally be listed in a building contract, but may not be obvious.

    The cost of a building permit will vary from city to city and county to county. As a rule, however, the cost will be a percentage of the total cost of the project. In Indiana, the cost will usually vary from .05% to 1%.

    Indiana allows local municipalities to collect fees when a new home is completed. These fees will vary and many are being challenged. At present, the typical cost for impact fees is about 3k-3.5k dollars, but can be higher. These fees attempt to fund public services like libraries and parks. These fees are also charged for basic service connections such as public water and sewer.

    These costs will vary widely depending on the subdivision. These fees will be based on the value of the home and whether the fees include amenities like lawn maintenance and a community pool. In Indiana, these dues can range from zero to hundreds of dollars per month.

    Although Indiana is not generally considered at risk for weather events like severe hurricanes, the region is vulnerable to midwest tornadoes and earthquakes. Professional builders will often take preventative steps to prevent or minimize damage by installing additional bracing. This bracing usually involves adding perpendicular bracing to the floor trusses to strengthen the floor system. The cost will vary from home to home, but the bracing will typically cost between $1,000.00-$3,000.00.

    Home Addition Costs In Indiana

    Adding an addition in Indiana will generally cost about 15%-20% more, compared to new construction. This is due to the additional time and labor required to connect the new structure to the old. Additions usually require interacting with existing foundations, exterior walls and roofs, which depending on the condition of the old structure, can be very involved.

    Room Addition Costs In Indiana

    These costs will also vary widely, depending on the original structure. For example, converting a garage to living space can often be done for 20.00-30.00 per square foot in Indiana, because the floor, walls, and roof are already built. The same goes for finishing bonus rooms. 

    Today’s Homeowner Tips

    Adding a single room in need of floors, walls, and roofs is generally the most expensive option, because the economy of scale will be very low.

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    What Is the Cost to Build a Garage In Indiana?

    In most cases, a 20’ x 20’ free garage without upscale exteriors like brick and stucco, can be built for about 20k in most Indiana cities. These garages will usually have vinyl siding and a single 16’ garage door.

    Attached garages will generally cost less in materials because at least one wall will already be present. However, in most cases the labor will increase as well to connect the two structures, so the price is still about the same as new construction, or 20k.

    Demolishing An Old House and Building a New One 

    In most cases, the only real-time to demolish an existing home to build a new one is if the land represents most of the value. For example, older subdivisions tend to be near city centers, making the lots more valuable in many cases. Tearing down a dilapidated structure makes sense in this case, as the return on investment will be magnified with a new home. 

    Editorial Contributors
    avatar for Alora Bopray

    Alora Bopray

    Staff Writer

    Alora Bopray is a digital content producer for the home warranty, HVAC, and plumbing categories at Today's Homeowner. She earned her bachelor's degree in psychology from the University of St. Scholastica and her master's degree from the University of Denver. Before becoming a writer for Today's Homeowner, Alora wrote as a freelance writer for dozens of home improvement clients and informed homeowners about the solar industry as a writer for EcoWatch. When she's not writing, Alora can be found planning her next DIY home improvement project or plotting her next novel.

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    photo of Roxanne Downer

    Roxanne Downer


    Roxanne Downer is a commerce editor at Today’s Homeowner, where she tackles everything from foundation repair to solar panel installation. She brings more than 15 years of writing and editing experience to bear in her meticulous approach to ensuring accurate, up-to-date, and engaging content. She’s previously edited for outlets including MSN, Architectural Digest, and Better Homes & Gardens. An alumna of the University of Pennsylvania, Roxanne is now an Oklahoma homeowner, DIY enthusiast, and the proud parent of a playful pug.

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