(800) 253-1482What Is the Average Cost to Build a House in Tennessee?
Building a home is exciting, but it’s also one of the biggest financial decisions you’ll ever make. On average, building a house in Tennessee costs $180 to $350+ per square foot, depending on where you build, the home’s design, and your material choices.
For a typical 2,000-square-foot home, that places the total construction cost at roughly $360,000 to $700,000, and that’s not including land, permits, or utility hookups.
Why the wide range? The Volunteer State’s diverse geography plays a major role, as it’s cheaper to build in rural areas or parts of West Tennessee, while building in Nashville, Franklin, and parts of Knoxville can push costs significantly higher due to labor demand and premium materials.
Still, there are many other factors at play. Before diving deeper into what affects these costs, here’s a quick snapshot of what the numbers look like statewide.
Tennessee Home-Building Cost Averages At a Glance
| Cost Metric | Value / Range |
|---|---|
| Average cost per sq ft | $180–$350+ |
| Low-end per sq ft | $130.97 |
| High-end per sq ft | $523.88 |
| Average cost to build a 2,000 sq ft home | ~$360,000 – $700,000 |
| Cost for Craftsman bungalow | $130.97 – $163.71 per sq ft |
| Cost for mid-range home | $163.71 – $360.17 per sq ft |
| Cost for high-end luxury home | $360.17 – $523.88 per sq ft |
| Production home estimate | $282,500 (approx.) |
How Location Shapes Your Build Cost
Where you build in Tennessee is one of the biggest cost drivers. Labor availability, material delivery, terrain, and regional construction demand can shift your price dramatically.
| Location Type | Cost Impact | Why Costs Increase or Decrease | Examples in Tennessee |
|---|---|---|---|
| Urban and High-Demand Areas | Higher overall build cost | Premium land prices, heavy contractor demand, stricter codes, and material shortages can drive prices up. | Nashville, Franklin, Brentwood, Knoxville suburbs, Chattanooga growth corridors |
| Affordable and Lower-Demand Areas | Lower total build cost | Labor is less expensive, land is more accessible, and material delivery is cheaper — though build times may be slower. | Memphis, Clarksville, rural areas in Middle or West Tennessee |
| Mountain, Lake, and Terrain-Heavy Regions | Increased site-prep and foundation costs | Steeper lots, rock excavation, engineered foundations, and limited delivery access can add thousands before construction even starts. | Sevierville, Johnson City, Smokies/foothill regions, lake communities |
| Weather and Risk-Sensitive Zones | Cost increase based on required protections | Flood zones may require elevated foundations; tornado-prone areas may need reinforced roofing or framing; wildfire zones may need fire-resistant materials. | Floodplain neighborhoods, tornado-risk corridors, mountain wildfire-risk areas |
Breaking Down Costs by Home Type in Tennessee
Not every home is priced the same. The style you choose plays a major role in labor requirements, materials, and overall complexity.
Craftsman Bungalow
- Lower construction cost
- Straightforward foundation & rooflines
- Uses standard materials
- Cost: $130.97 – $163.71 sq ft
Mid-Range Home
- Popular with new families
- Open floor plans, modern kitchens
- Moderate material and labor costs
- Cost: $163.71 – $360.17 sq ft
High-End or Luxury Custom Build
- Large square footage
- High-end wood, stone, and custom finishes
- Complex layouts & premium labor
- Cost: $360.17 – $523.88 sq ft
What Drives Your Price Per Square Foot in TN?
Your price per square foot isn’t determined by size alone. Everything from the finishes you choose to how complex your layout is will influence your total cost.
Upgrades, labor availability, and design choices all stack together to shape the final build price of your home.
| Factor | Examples | Impact on Cost |
|---|---|---|
| Materials & Finish Levels | Vinyl vs. fiber-cement siding; basic shingles vs. metal roofing; laminate vs. hardwood flooring; mid-grade vs. premium cabinetry | Higher-end materials raise per-square-foot costs quickly |
| Labor Skills & Availability | Electricians, masons, HVAC techs, framers | Scarcity of skilled labor increases hourly rates and extends project timelines |
| Architectural Complexity | Vaulted ceilings; custom windows; multi-story designs; large porches | More engineering, structural support, and labor hours required |
| Energy-Efficient Upgrades | Spray foam insulation, triple-pane windows, and solar panels | Higher upfront investment but long-term utility savings |
| Smart Home Systems | Security systems; automation; integrated audio | Optional, but adds equipment and installation costs |
Hidden & Often Overlooked Costs
Even the most organized builders get caught off guard by expenses beyond the basic construction quote.
Tennessee’s terrain, permitting rules, and utility setup costs can significantly influence your total budget. Planning for these early keeps your project on schedule and within budget.
Cost Breakdown by Category
| Cost Category | What It Includes | Typical Range |
|---|---|---|
| Land Preparation | Clearing, grading, soil testing | $1,500–$5,600+ |
| Foundation | Slab, crawl space, or basement; additional engineering on uneven or rocky lots | $10,000–$35,000+ |
| Utilities | Water/sewer or septic; electrical setup; natural gas (if available) | $10,000–$34,500+ |
| Permits & Inspections | Building, HVAC, plumbing, electrical permits; required inspections | $850–$2,500+ |
| Driveways, Landscaping, Exterior Items | Paving, sod, walkways, exterior lighting | Varies widely; often excluded from the builder’s base quote |
Cost Examples for a 2,000-Square-Foot Home
To make the numbers more practical, here’s what real budgets look like for a typical 2,000-square-foot home in Tennessee, accounting for various finishes, locations, and customization.
| Build Type | Cost per Sq Ft | Estimated Total |
|---|---|---|
| Basic Build | $130–$180 | $260,000–$360,000 |
| Mid-Range Build | $200–$250 | $400,000–$500,000 |
| High-End Custom | $350–$523+ | $700,000–$1,000,000+ |
Rural vs. Metro Building Costs in Tennessee
Metro areas come with speed and convenience, but at a higher cost. Rural regions offer savings, though you may trade that for slower timelines or added utility work. These are general trends, so your specific location should always be factored into your budget.
| Location Type | Advantages | Cost Considerations |
|---|---|---|
| Rural Areas | Lower labor costs, cheaper land, and fewer impact fees | Slower material delivery; fewer contractor options; potential utility extension costs |
| Metro Areas | Faster access to materials; large contractor pool; more design and customization options | Higher labor and land prices; increased demand raises the overall project cost |
Should You Build or Buy in Tennessee?
Whether you should build or buy a new home depends on more than just cost.
Some studies have shown that building can be significantly more expensive than purchasing an existing home in certain years, while in others, building may save money due to shifting construction and market conditions.
That’s why your decision should factor in both your budget and your lifestyle — how quickly you need to move, how much customization you want, and how long you plan to stay.
| Option | Best For | What You Get |
|---|---|---|
| Building a Home | Anyone who wants control and personalization | • Full customization • Modern, energy-efficient design choices • New construction with fewer immediate repairs or upgrades |
| Buying a Home | People who want a simpler, faster process | • Quick move-in timeline • Lower upfront costs • Established neighborhoods with predictable market values |
How to Keep Your Build on Budget in Tennessee
- Choose simple designs and rooflines.
- Compare multiple builder bids.
- Pre-shop materials to avoid price swings.
- Avoid last-minute design changes.
- Ask for allowances in writing.
Is Building a Home in Tennessee Worth It?
Building a home in Tennessee comes with incredible possibilities, but it requires careful planning.
By understanding square-foot costs, location differences, material choices, and hidden expenses, you can confidently create a home that fits your budget and lifestyle.
However, your building costs are only part of the equation. Many of the same factors that go into determining how much you’ll pay to build your home go into calculating how much you’ll spend on home insurance.
Bigger homes using more expensive building materials in highly desirable areas, or even areas prone to extreme weather, can expect to pay higher premiums on average.
But if you plan ahead, compare your options, and understand the cost factors driving your premiums, you can also save on coverage.
There are even discounts for features you can add to your home that may cut your homeowners coverage, such as security systems.
At Freedom Insurance Group, we help homeowners throughout the Volunteer State find top-rated, trusted carriers and compare their rates.
In doing so, we’re able to help homeowners find the lowest rate possible without sacrificing coverage.
If you’re building a new home, don’t overpay for insurance. Get a home insurance quote or contact us by calling the number at the top of the page to speak with a licensed expert.
Sources:
NAHB. Accessed December 2025.
Realtor. Accessed December 2025.
