How Much Does It Cost To Build A House In Tennessee?

If you have always dreamed of building a home, Tennessee may be for you. Tennessee is home to a wealth of natural beauty. This includes the Great Smoky Mountains, lakes, rivers, and rolling hillsides. There are bustling cities, but also plenty of rural areas for you to spread out. You will be surprised by the value The Volunteer State provides.

The cost of building a home in Tennessee varies. Cities like Nashville are booming, but there are plenty of places where you can catch a deal. We’ll break down the construction costs of building a new construction home in Tennessee.

What’s The Average Cost To Build A House By Square Foot In Tennessee?

The average cost to build a house in Tennessee is $130.97 per square foot. To put that in perspective, the average price of a 2,000-square-foot home in Tennessee is $261,940. This estimate is probably on the low-end for cities in Tennessee, however.

Is Building A House In Tennessee More Expensive Than In Other States?

Tennessee has comparable home prices to neighboring states like Alabama ($133.81/ sq ft) and Georgia ($136.93/ sq ft).

But you really start to see the savings in Tennessee when you compare it to higher cost of living states like California ($202.72/ sq ft), New Jersey ($188.45/ sq ft), and New York ($180.09/ sq ft). So if you’re looking to relocate, Tennessee might be the right fit.

Ariel image of a rural town in Tennessee

Is land cheaper in Tennessee?

The average cost of an acre of land in Tennessee is $14,400. But some residential lots in high-cost areas like Nashville can go for much more than this.

If you compare that to California at around $39K, you can see how costs can add up in Tennessee.

How Do Different Cities Compare In Price When Building A House In Tennessee?

Not all cities cost the same in Tennessee. Let’s break down the costs of the major cities in Tennessee.


Ariel image of downtown Nashville, Tennessee

Nashville and its suburbs are the priciest areas in the state. The average cost per square foot is $193.24 in most areas. Tremendous growth brings demand. So you are likely to pay more for a new house when building in Nashville.

But the tradeoff may be worth it. Nashville has a lower cost of living compared to coastal cities, and the vibrant culture is unparalleled compared to other parts of the state. There are also many suburbs that are great places to raise a family such as Brentwood, Franklin, or Mt. Juliet.


Image of Beale Street in Memphis, Tennessee

Memphis is the cheapest major city in the state per square foot, clocking in at $108.50. Memphis is also a large city with many amenities like an international airport, NBA team, and great BBQ. So Memphis is a good option for those looking for a deal while also needing access to a major city.


Ariel image of downtown Chattanooga, Tennessee

Chattanooga has been experiencing a significant spike in prices lately at $112.07 per square foot on average. This smaller city brings a lot to the table. Chattanooga is an outdoor town with many opportunities to be in the mountains or water. Its quirky culture tilts a little hippie, and people love the area for its smaller-scale urban feel.


Image of Knoxville, Tennessee

Knoxville is another option for those looking for smaller cities in Tennessee. On average, a new construction home in Knoxville costs $109.97 per square foot. With the Smoky Mountains in your backyard and many of the amenities of living in a large college town, you’re bound to find a lot to do. You also get the added benefit of one of the lowest costs of living in the state.

Cost Concerns For Building A House In Tennessee

Here are some significant areas where you will run into cost issues while building a new home in Tennessee.


Materials typically comprise 30- 50% of the overall cost of a residential new construction project. But with national supply chain issues, the material cost can change and likely increase before a new home is completed. Over the last few years, the cost of lumber has skyrocketed, affecting the bottom line of home builders in Tennessee. Most recently, the construction industry has been experiencing a concrete shortage. These global supply chain issues trickle down and affect your home’s cost and construction timeline. So not only do you pay more for building materials, but you also may have to pay for delays and added labor costs.

Your home construction cost can also go up if your choose high-end finishes. Luxury homes require higher-priced materials and specialized subcontractors to install these complicated finishes.


Image of a construction worker framing the roof of a house

The average cost of a construction worker in Tennessee is between $15- $18 per hour. While this cost is lower than in other parts of the country, it is still costly. It’s crucial to hire a reputable builder and general contractor who can manage labor costs. You may not always get a say in material price increases, but an experienced builder will know how to use labor efficiently so that these costs do not skyrocket.

Felix can assist in your selection of a quality builder. We vet hundreds of builders in local markets to find the right one for you.

Other factors

The type of new construction home that you choose can have a major impact on your total cost. Custom homes are by far the most expensive. The infinite choices in materials, unstandardized construction process, and potential lot issues can add up quickly.

Some more cost-friendly options are semi-custom and spec houses. Building a new house from predetermined plans that you get to customize is a great compromise. You can choose the elements that make your home unique without breaking the bank.

What’s The Cost Breakdown Of Building A House In Tennessee?

We pulled data from the National Home Builders Association to give you an idea of where costs come from when building a house. This section will give you an idea of where prices start to add up for your cost estimates.


The average cost for a finished lot is $89,540. A finished lot refers to one that is ready for construction and has all utility systems installed. You often find finished lots in subdivisions, and you purchase lots from a builder.

The other option is to purchase a plot of land that isn’t finished. While this option has a smaller initial price tag, you will have to get the site ready yourself. Getting a site ready could cost a significant amount if the lot needs to be cleared of trees and graded. This could result in a significant cost, and you could hit unknown delays. So do your homework carefully before purchasing unprepared land.

Plans, permits, and other fees

A lot of money goes into your house before you even start construction. The average cost of plans, permits, and other fees totals around $18K. Let’s break down the average costs for these fees:

  • The national average for building permits and inspections is around $5,086. But in Tennessee, the price is just under $2,000. So you will save a little with permitting and inspections in Tennessee. But this is essential to ensure you meet the proper building codes.
  • Many communities will charge an impact fee of about $3,800 to pay for new infrastructure.
  • If you’re using an architect for a truly custom home, you can expect to pay, on average, $4,335. Your house plans include your floor plans which will determine the best layout for your square footage. So this is money well-spent if you’re not using the builder’s plans.

Site work and foundation

Image of a slab foundation for a new construction house

The average cost of site work and a foundation is $34,850. This is arguably one of the most critical parts of your home’s construction. Your house will require heavy-duty machines to perform excavation and professionals to ready the land for construction. You also never know what’s under the surface until you start digging. Your lot may require additional drainage or a retaining wall if the topography calls for this.

This is also when water, electricity, and sewer get set up. Your lot may require a septic tank if you are far from sewer lines. Check with your local government.

If you need to install a septic system, you will need to get a percolation test or perc test. A perc test will determine the soil absorption rate and you will receive a septic permit that will show how many bedrooms your septic system can accommodate. If you know your property will require septic, it’s best to perform the perc test before purchasing the land.

Then comes the foundation. Some homes have concrete slabs, while others have a crawlspace foundation. Your builder will also charge a premium for installing a basement as well.


When builders are framing your house, they are essentially building the skeleton. The average cost of framing is $51,589. Lumber costs are high right now, and your house requires a lot of lumber to create the frame. You are likely to pay more if your home’s plans require trusses in the roof (triangular roof build) or if you use metal or steel in your framing.

Exterior finishes

The exterior finish includes the materials that cover the walls. This includes brick, stone, and siding. This cost will fluctuate based on material choice. The cost also includes things like windows and doors. Consider more premium materials for energy efficiency because the savings can pay off in the long run.

The average cost for exterior finishes clocks in at $41,690.

Major systems

The major systems of a new construction home include plumbing, electrical, and HVAC. This does not include fixtures– those get factored into interior costs. But these are the systems inside your walls that make everything work in your home. You can expect to pay around $44,000 for this portion of construction.

Interior finishes

Image of a construction worker installing insulation in a house

Interior finishes can add up in a new build. That’s because this category encompasses a wide range of quality and materials. There are also a lot of variabilities. You can upgrade many different parts of your interior, affecting cost. Here are the average prices for major interior finishes according to the National Association of Home Builders:

  • Insulation: $5,184
  • Drywall: $10,634
  • Interior trims, doors, and mirrors: $10,605
  • Painting: $8,254
  • Lighting: $3,437
  • Cabinets, countertops: $13,540
  • Appliances: $4,710
  • Flooring: $11,998
  • Plumbing fixtures: $4,108
  • Fireplace: $1,867
  • Other: $923

This totals to $75,259 for interior finishes or about 25% of your new construction budget.

Final steps

The final steps of building your house include landscaping, outdoor structures (like decks, patios, and porches), driveway, and general cleanup. This will cost around $20,000.

Don’t forget that besides building a house, additional fees get added in the form of closing costs. This includes lender fees if you’re using a loan, title insurance, and HOA fees if your home is located in a community managed by a homeowners association. We recommend you speak with an experienced Realtor to determine your closing costs.

Can You Afford A New Constructing A Home In Tennessee?

The best part of building a house is that there can be some wiggle room with the budget. For example, you may decide to upgrade certain features while leaving others standard. There are ways to make decisions that can help you afford a new construction home in Tennessee.

Make a budget

We’ve provided you with the details on typical costs for a new build in Tennessee. These costs are just averages, but they will give you an idea of where to start.

When creating a budget, you need to work backward. Calculate your typical expenses. Look at what you are paying in monthly housing costs. Can you afford to pay more, less, or the same? From there, you know what your typical mortgage costs should be each month.

Consider your existing house (if you have one)

Image of a man and woman packing items into a moving box.

If you have an existing house, what will be the expected proceeds from selling this home? You can use these proceeds as a down payment on your new build. When will you sell your home? Do you need the money to get your build going? Consider these questions as you move forward. At Felix, we have a lot of experience with new construction homes and can be a great resource if you have questions about the process.

Pick a location

Just because a lot is for sale doesn’t mean you can build on it. Many people will opt for a subdivision because of the ease of building, and the costs are more manageable. If you’re wishing to purchase land in a rural area, make sure to conduct the proper soil test and look into the permits that may be required. Narrow down the location based on your lifestyle, commute, and price.

Find the right builder

Look at builders who are working in your preferred location. Take the time to talk with them about your budget and the options they have to make sure they are a good fit.

If you’re especially budget-conscious, take the time to do your homework on the builder about their ability to stay on budget. Talk to recent customers and read online reviews or ask an experienced Realtor about the builder’s reputation. It’s key that you choose the right builder that knows how to give you an accurate quote and stick to it.

Consider the size and type of house

Many costs are multiplied as your house gets bigger. Choose a type of house that is more cost-efficient. For example, one-story homes are more affordable.

The beauty of building a new house is that you have control over the decision-making process. So the decisions you make in the planning stages can add up big when you look at the final price.

Felix Helps You Manage Your New Build

The best way to stay on budget with your own home is to do your research before you even choose a builder.

Felix will guide you in your journey and answer any questions that come up along the way. While we put the most reputable builders in front of you, Felix will guide you through the building process so that you stay on budget.

Home buyers of all experience levels use Felix to find their dream home. Sign up with Felix today to get started!

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