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Building a House in Tennessee

Discover the true cost of building your dream home in Tennessee.

Decoding the Cost to Build a House in Tennessee: Real Numbers and Scenarios

Building a house is an exciting endeavor, but it’s essential to consider the cost before embarking on such a significant project. Understanding the basics of home construction costs is essential for anyone considering embarking on this exciting journey. 

Cost Breakdown Summary

  • Regional Variations in Construction Costs: Tennessee features diverse regions, each with its unique construction cost factors. In urban areas like Nashville or Memphis, costs may be at the higher end of the range, while rural areas may offer more budget-friendly options.
  • Foundation Costs: The choice of foundation plays a significant role in your budget. A standard concrete slab foundation can cost between $5,000 and $15,000, while a full basement foundation may range from $15,000 to $30,000.
  • Material Choices: The materials you select for your home can vary widely in cost. Opting for high-end finishes and materials can significantly increase your expenses. A mid-range kitchen, for instance, may cost around $20,000, while a luxury kitchen can exceed $50,000.
  • Labor Expenses: Labor costs in Tennessee generally range from $20 to $40 per hour. The complexity of your project, location, and choice of contractors can influence these rates.
  • Permit and Inspection Fees: Navigating Tennessee’s building regulations involves permit and inspection fees. Permit fees are typically based on the project’s estimated cost and can range from $500 to $2,500 or more. Inspection fees vary based on the number and type of inspections required.
  • Energy Efficiency Investments: Energy-efficient features are popular in Tennessee. Investing in these features can add upfront costs but lead to long-term savings through reduced energy bills, as we outline below.
  • Design and Customization Costs: The level of customization you desire affects your budget. We’ll provide insights into budget-friendly design choices that align with your vision, as well as other interior finishing options, below.
  • Financing Your Dream Home: Learn about financing options available in Tennessee, including construction loans, and explore scenarios that help you manage your budget effectively.
  • Budget Contingencies: Unforeseen expenses are common in construction projects. Setting aside a contingency budget of 10% to 20% of the total project cost is advisable.
  • Realistic Timelines and Holding Costs: Project timelines affect your budget. Delays due to weather or other factors can lead to additional holding costs, such as temporary housing or storage.
  • Resale Value and Investment Potential: Consider the long-term value of your investment. Your choices during construction can impact your home’s resale potential, making it a wise investment.
Please note that the above estimates are ballpark figures. Home-Cost’s home-estimating software helps you understand the cost of building a home in your specific zip code and uses realtime, updated labor and material costs specific to your location. You can select the quality of finishes, see appliance costs and much more!

Understanding the Basics of Home Construction Costs

When it comes to building a house in Tennessee, one of the primary considerations is the overall construction cost. This cost encompasses everything from the land and site work to the design and plan costs, as well as the actual construction and material expenses. 
Home construction costs can vary significantly depending on several factors, including the location, materials used, labor costs, and additional expenses. It is essential to consider these factors to get a realistic estimate of the overall cost.

The Role of Location in Construction Costs

The location plays a vital role in determining the cost of building a house in Tennessee. Different regions may have varying land prices, accessibility to utilities, and local building regulations. Additionally, factors such as proximity to amenities, schools, and transportation can impact the overall construction cost.
For example, building a house in a rural area might be more affordable due to lower land prices and fewer building regulations. On the other hand, constructing a home in a prime urban location might come with higher land costs and stricter building codes.
Furthermore, the availability of utilities such as water, electricity, and sewage systems can also affect construction costs. If the site requires extensive work to connect to these utilities, it can add to the overall expenses.

Breaking Down the Costs: Materials, Labor, and More

One of the significant components of home construction costs is materials. The quality and type of materials used can significantly impact the final price. Homeowners have a wide range of options when it comes to choosing materials, from basic to high-end finishes. Each choice comes with its own price tag.
For instance, opting for premium hardwood flooring or custom-made cabinetry can increase the overall cost. On the other hand, selecting more affordable alternatives can help keep the expenses in check.
Labor costs, including wages, permits, and insurance, are also important factors to consider. Skilled labor is crucial for ensuring the quality and timely completion of the construction project. Hiring experienced contractors and construction workers might come at a higher price, but it can provide peace of mind and minimize the risk of costly mistakes.
Moreover, additional expenses such as architectural fees and permits should be factored into the overall cost. Architects play a crucial role in designing the house and ensuring that it meets the homeowner’s requirements and local building codes. Obtaining the necessary permits from local authorities is also essential to avoid legal issues and ensure compliance with regulations.
It is worth noting that unexpected expenses can arise during the construction process. These can include unforeseen structural issues, changes in design or materials, and delays due to weather conditions or other external factors. It is advisable to have a contingency fund to cover such expenses and avoid any financial strain.
In conclusion, understanding the basics of home construction costs is essential for anyone planning to build a house in Tennessee. By considering factors such as location, materials, labor, and additional expenses, homeowners can make informed decisions and create a realistic budget for their construction project.
Home-Cost is the industry leader in accuracy for housing construction estimates. This is because we look at your exact zip code and tell you the cost of labor, materials, finishes, and much more, customized to your exact dream house requirements. This helps you better understand the impact of each line item on your overall cost and adjust your budget accordingly. Learn more about our products and see sample reports here!

Average Cost to Build a House in Major Tennessee Cities

Building a house in Tennessee’s major cities, such as Nashville, Memphis, and Knoxville, can come with varying price tags. Here’s an overview of the average costs in each location:

Cost in Nashville

Nashville, the state capital, is a popular city for home construction. The average cost to build a house in Nashville ranges from $100 to $200 per square foot, depending on factors such as location, design, and material choices. To get a customized estimate for your dream home in Nashville, you can use our dream home calculator, which allows you to input your zip code and customize your home to get an accurate home cost estimate.
Nashville, also known as the “Music City,” is a vibrant and growing metropolitan area. With its booming economy and thriving music industry, many individuals and families are choosing to build their dream homes in this lively city. The cost of building a house in Nashville reflects the high demand and the quality of life it offers.
When it comes to location, the cost of land can greatly impact the overall cost of building a house in Nashville. Prime locations in popular neighborhoods or close to downtown may command a higher price per square foot. On the other hand, suburban areas or outskirts of the city may offer more affordable options.
Design choices also play a significant role in the cost of construction. Custom-built homes with unique architectural features and high-end finishes tend to be more expensive compared to standard designs. The complexity of the design, such as multiple levels, intricate rooflines, or specialty materials, can also drive up the cost.
Material choices, including flooring, countertops, cabinetry, and fixtures, can also impact the overall cost. Opting for high-quality, luxury materials will naturally increase the price per square foot. However, there are also more budget-friendly options available that can help homeowners stay within their desired price range. 

Cost in Memphis

In Memphis, the average cost to build a house is slightly lower compared to Nashville. On average, homeowners can expect to spend between $85 and $150 per square foot. However, prices can differ based on specific project requirements and the “price-per-square-foot” can be an oversimplification, which is why we recommend using our software to get the most accurate, relevant estimate possible.
Memphis, known for its rich musical heritage and delicious barbecue, offers a more affordable option for those looking to build a house in Tennessee. The lower cost of construction in Memphis can be attributed to factors such as the local economy, land availability, and the cost of living in the area.
Similar to Nashville, the location within Memphis can influence the cost of building a house. Different neighborhoods may have varying land prices, with some areas being more desirable and therefore more expensive.
Homeowners in Memphis have the opportunity to work closely with builders and architects to create a house that suits their needs and preferences. By carefully selecting materials and finishes, individuals can strike a balance between quality and cost, ensuring their dream home becomes a reality within their budget.

Cost in Knoxville

Knoxville, situated in the eastern part of Tennessee, offers a more affordable cost of building a house. The average price per square foot ranges from $80 to $140, making it an attractive option for those looking to save on construction expenses. Use our product to get the most accurate estimates for your dream home, tailored to your zip code and your house specifications.
Knoxville, known for its natural beauty and outdoor recreational opportunities, is a city that combines affordability with a high quality of life. The lower cost of construction in Knoxville allows homeowners to invest in other aspects of their dream home, such as landscaping or additional amenities.
As with any city, the location within Knoxville can impact the cost of building a house. The proximity to downtown, schools, and other amenities can affect land prices and subsequently the overall cost of construction.
When building a house in Knoxville, homeowners have the opportunity to work with experienced builders who understand the local market and can provide guidance on cost-saving measures without compromising on quality. By exploring different material options and design choices, individuals can create a home that reflects their style and meets their budgetary needs.

Interior Finishing Costs

Once the structural work is complete, it’s time to focus on the interior finishes that will bring your home to life. This includes flooring, cabinetry, countertops, plumbing fixtures, electrical fittings, and paint. The cost of these finishes will vary greatly depending on your preferences and the quality of materials selected.
When it comes to interior finishes, there are endless options to choose from. From luxurious hardwood flooring to budget-friendly laminate, the choice is yours. Similarly, the type of cabinetry, countertops, and plumbing fixtures you select can significantly impact the overall cost. It’s essential to allocate a portion of your budget for these details and carefully consider your priorities and preferences.
While it’s tempting to splurge on high-end finishes, it’s important to strike a balance between your budget and your desired aesthetic. Consider prioritizing the areas of your home where you spend the most time or where quality matters the most, such as the kitchen or master bathroom.
Building a house is a complex process, and understanding the different components that contribute to the overall cost is crucial for a successful project. By carefully planning and budgeting for each stage, you can ensure that your dream home becomes a reality without breaking the bank.

Financing Your Home Construction in Tennessee

Now that you have a better understanding of the costs involved, let’s explore the options for financing your home construction in Tennessee.
Building a new home is an exciting endeavor, but it can also be a significant financial commitment. Fortunately, there are several financing options available to help make your dream home a reality.

Construction Loans and How They Work

One common way to finance a new home construction is through a construction loan. This type of loan provides the funds necessary to cover the costs of building a new home from the ground up. Construction loans typically have different terms and requirements than traditional mortgages, so it’s important to familiarize yourself with these before proceeding.
Construction loans are typically short-term loans that provide funds in stages as the construction progresses. These loans often have higher interest rates and require a larger down payment compared to traditional mortgages. However, they offer the advantage of providing funds specifically for construction purposes, allowing you to pay for materials, labor, and other expenses as the project moves forward.
Before applying for a construction loan, it’s essential to have a detailed construction plan, including cost estimates and timelines. Lenders will review these plans to assess the feasibility of the project and determine the loan amount.

Mortgage Options for New Builds

Another option to consider is getting a mortgage for your new build. Unlike construction loans, mortgages are designed for finished homes. Some lenders offer specialized mortgage options for new constructions, allowing you to transition seamlessly from the construction phase to the mortgage stage.
With a mortgage, you borrow a lump sum of money to purchase the completed home. The loan is secured by the property, and you make regular monthly payments over an extended period. Mortgage terms can vary, but they typically range from 15 to 30 years.
When applying for a mortgage for a new build, lenders will consider factors such as your credit score, income, and the appraised value of the property. It’s important to shop around and compare mortgage rates and terms to ensure you get the best deal.

Understanding Down Payments and Interest Rates

When financing a home construction, you’ll need to consider the down payment required by the lender. This is typically a percentage of the total loan amount and can vary depending on the lender and type of loan. A larger down payment can help reduce your monthly mortgage payments and may even qualify you for better interest rates.
Interest rates are another crucial factor to consider when financing your home construction. The interest rate determines the cost of borrowing money and can significantly impact your monthly payments. It’s important to compare interest rates from different lenders and consider whether a fixed-rate or adjustable-rate mortgage is more suitable for your financial situation.
Repayment terms are also essential to understand. Some mortgages offer fixed monthly payments, while others may have adjustable payments that can increase or decrease over time. Carefully review the terms and conditions of any loan before committing to ensure you can comfortably afford your new home once construction is complete.
Home-Cost is the industry leader in accuracy for housing construction estimates. This is because we look at your exact zip code and tell you the cost of labor, materials, finishes, and much more, customized to your exact dream house requirements. This helps you better understand the impact of each line item on your overall cost and adjust your budget accordingly. Learn more about our products and see sample reports here!

Ways to Save on Home Construction in Tennessee

If you’re looking to build a house in Tennessee while keeping costs in check, there are several strategies you can employ: 

Choosing the Right Builder

Selecting an experienced and reputable builder can help you navigate the construction process efficiently. Seek recommendations, review their previous work, and make sure they understand your budget constraints.

Efficient Use of Materials

Opt for cost-effective yet durable materials when designing your house. Work closely with your architect and builder to find alternatives that do not compromise quality while reducing costs.

Timing Your Construction

Timing is everything when it comes to home construction costs. Consider starting your project during the off-peak season to take advantage of competitive prices and potentially secure discounts on materials and labor.


Building a house in Tennessee involves careful planning and consideration of numerous factors. By understanding the basics of home construction costs, recognizing the factors influencing the cost, knowing the average costs in major cities, and employing cost-saving strategies, you can embark on your Tennessee home construction journey with confidence.

We highly recommend Home-Cost’s products in helping you understand the cost of building a home at your specific zip code. Our products enable you to change materials, understand labor costs, and customize your plan to get accurate estimates. Learn more about our features and pricing!