How Much Does it Cost to Build a House in Nashville?

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The city of Nashville is the capital and most populous city of Tennessee. It has been dubbed the Country Music Capital for being a major music recording and production center. The city’s music industry is estimated to provide over 56,000 jobs in the Nashville area alone and contributes more than $10 billion to the country’s economy. Its healthcare industry is another big sector for the city, contributing over $30 billion annually while providing more than 200,000 jobs to its residents.

Earning the title “Southern boomtown” by politicians, Nashville has become the third-fastest-growing metropolitan economy in the U.S. According to Forbes magazine, the Nashville region is the #1 Metro Area for Professional and Business Service Jobs in America, while also placing 5th as The Best Place for Business and Careers and 4th Best City for White Collar Jobs.

Despite the great job opportunities, Nashville’s housing market significantly dropped in April 2020 because of the COVID-19 pandemic. It decreased by 17% in annual sales as buyers grew afraid of real estate transactions. Fortunately, the city is now showing signs of recovery, and housing demands are getting stronger; despite the material shortages, construction is still being done. Single family detached permits were calculated to be nearly 21% more than the projected number, while multi-family housing permits are 15% more. Numerous people are also relocating to Nashville, most of them coming from Chicago, Los Angeles, New York, Dallas, and Atlanta. The most common reason is that Greater Nashville offers homes that are bigger yet are less expensive than other metro areas.

With the current status of the industry and the government’s efforts in stabilizing issues, future homeowners and developers are asking, “how much does it cost to build a house in Nashville?”


The Cost of Building a Custom Home in Nashville

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According to the National Association of Home Builders, the price for new single family homes is $485,128. Forbes reported a significantly lower value with $300,000, which is around $150 per square foot. Home prices still depend on the location, with metro areas considerably more expensive than rural areas.

The US Census Bureau reported that the average cost of building a house in the country’s southern region is estimated to be around $110.19 per square foot — the lowest among other regions. For Tennessee, specifically, Forbes also reported that homebuilding costs are valued to be around $130.97 per square foot — approximately $262,000 for a 2000-square-foot home. Zillow recorded that the state experienced a 21.1% rate of increase over the past year.

Homes in Nashville are reportedly lower than the national average with $414,853 despite increasing by 19.2% compared to the previous year. More specifically, building a value-conscious home starts at $149 to $281 per square foot, mid-tier homes at $282 to $342 per square foot, and luxury homes at $343 per square foot and up. The price rises relative to size, material, design, complexity, and customization.

Homebuilding costs are expected to increase year after year constantly. Before starting a project, thorough research and planning must be done to determine what works with your budget. Written below are two of the factors needed to be considered, namely the hard and soft costs. These categories include construction fees, permit fees, architectural fees, land costs, and more.

Hard Costs


Hard Costs are costs that directly relate to the actual building of the home. Things like home additions, roofing, furnishing, and others all fall under this category. For the city of Nashville, the average cost per square foot was around $130.97 prior to the pandemic affecting the economy. Today, the prices have risen to an estimate of $149 for low-end homes, $161-$282 for mid-end houses, and $343 for high-end residences. For home additions, the average price is approximately $36,617 but can range anywhere from $18,524 – $55,570, as per HomeAdvisor. These numbers however are subject to change depending on the style of the home whether it is a low-end home or a luxury residence which can cost up to around $100,000. Another point to consider is the price of roofing which costs around $3.68 per square foot. Lastly, furnishings such as cabinets and countertops have a price range of $3,600  to $6,877, averaging around $5,056. As mentioned above, prices are subject to change and more expensive homes can have furnishing costs that reach an estimate of $8,400. 

Figure 1. Typical cost breakdown of a single-family home constructed using the conventional method, according to Home Builder Digest.

Extra Amenities

Home additions are a common way homeowners show their creativity and customize their homes. This not only makes the home more comfortable, but also adds value to the house itself. 

Deck

Having a deck is like adding another room to your home. It is a great outdoor space where you and your family can spend the hot summer and mild winters of Nashville. The average price for a composite deck, a mix of wood and plastic, is $60 per square foot — around $19,200 for 320-square-foot. Wooden decks are the cheaper option for this which costs about $40 per square foot — approximately $12,800 for 320-square-foot.

Outdoor Living

The COVID-19 pandemic made family getaways no longer viable options. Theme parks, pools, and other forms of amusement have been closed and are yet to open. This led to homeowners wanting to improve their homes into a more cozy and relaxing place. According to the news site Tennessean, the most common improvements and additions made are screened-in porches, swimming pools, and outdoor kitchens.

Adding a screened-in porch into a home provides shaded seating that protects homeowners from direct sunlight and gives privacy. It can be a place to unwind and enjoy the summer season. This costs roughly $12,468 – $95,908 and includes all the materials, equipment, and machinery needed.

Having a swimming pool is another way your family can enjoy the summer season; a refreshing dip to fight hot weather. In-ground pools are the most popular choice and these cost around $60,000 – $200,000, depending on the materials used, with gunite pools being the most expensive one. Adding an outdoor kitchen along with the pool can further enhance this mini oasis. The price range for having one starts at $5,057 to $17,276, which may increase depending on the materials and level of customization.

Custom Cabinets

Another way to show artistry is to incorporate custom cabinets. A homeowner can have cabinets tailor-made to be best suited for their family and their home. Although high-quality materials can be chosen, this doesn’t always mean that they are better than stock or semi-custom cabinets. It will still depend on the installation and level of craftsmanship that professionals have. Getting a custom cabinet in Nashville roughly starts at $805 to $4,478. This price range includes the labor costs, materials, equipment and machinery, and clean-up fees, but excludes general contractor fees. This typically adds $282.24-$352.80, bringing the total to $1,087.24-$4,830.80. It may also still increase depending on the materials and how intricate designs can be.

Soft Costs


Soft Costs are costs that do not directly relate to the actual building of the residence. These include permitting, design fees, architectural fees, and land costs. Depending on the city and neighborhood, prices tend to increase or decrease. Factors such as property size and city permit policies subject the price range to change. The same can be said for architects and designers that have different price ranges depending on the type of service and how big the project is. These architects and designers may charge an hourly rate as well. 

Figure 2. Soft cost percentage and average price range of additional fees, determined from the overall cost of custom home building in Nashville.

Cost of the Land

As with any piece of land, the cost is subjective to numerous factors contributing to the final price. Things like lot size, neighborhood, and city play a role in determining how much the land will cost. Data from Zillow listings suggest that the average price of land is roughly around $224,840.00. Converting this data to more specific data, the average cost per acre is around $144,098.43. In addition to these averages, the price is subject to change because of the ongoing pandemic. This may result in more expensive land fees, increasing the total cost for building a home.

Permits and Other Fees 

Nashville experienced an increase in single family housing permits, with over 1,710 permits issued — 20% more than the projected number.

For the permit fees specifically, it varies between projects. For projects that are $2,000 or less, the price is at a flat rate costing at $28.85. Every $1,000 for projects with a price of $2,000 will receive an extra pay of no more than $5.77 This means that depending on the total cost of the project, permit fees can remain the same at $28.85 as long as the price does not exceed $2,000. And if it rises to $3,000 or $4,000 dollars an additional $5.77 may be added. This is something that needs to be considered since it has the possibility of making the final price double depending on the size of the project. 

Architecture and Design Fees

For architectural fees, it varies depending on the architects themselves and the size of the project. The most commonly used pricing method by architectural and design firms is the percentage of the total construction costs. They typically charge around 10%-15% of the construction costs, and this rate is the recognized industry standard. Studio 8 Design confirms this as the firm uses this method and rates regularly. The firm also added that several aspects might push the architectural fee higher or lower, including the project’s complexity, detailing, finishing, and other personalization done by the client.

Aside from the percentage method, project owners may negotiate with the architects and designers to go for a different pricing method. Some architects work hourly, while others use a hybrid approach — a mixture of the two methods. A fixed price can also be agreed upon, given that the architect will only do the settled scope of the job. Any tasks further or more than what is agreed upon will raise your total architectural and design fees.


How do the custom home building costs in Nashville compare to other nearby cities?

Homes in the country’s southern region are estimated to be around $100 per square foot, the lowest cost per square foot compared to other regions. Tennessee is the third most expensive state to buy a house in the South Region with $135 per square foot — following Florida with $167 per square foot and Virginia with $163 per square foot, according to Insider.

The Nashville Metropolitan Area (Nashville-Davidson-Murfreesboro-Franklin) is home to almost 2 million residents. Niche reported that counties and suburbs in this area are well into the top 5 as the most diverse, the best place for young professionals, and the best place to live in Tennessee. This resulted in more people moving into greater Nashville and ranked in the 6th place for the fastest housing construction with over 32% in new housing units. According to the recent construction permits in the online contractor platform Buildzoom (BZ), new custom-built homes in the Nashville Metroplex are priced at $149-$282 per square foot — approximately $300,000-$565,000 for a 2000-square-foot home. Zillow predicts that homes in the metro area will rise to 17.3% by next year.

Home values in Nashville rose by nearly 122% since October 2011 as it was recorded as one of the country’s best long-term real estate investments. Today, the median price in the city is estimated to be around $376,000 — a 20.2% increase from last year’s $313,000. The trend continues for Murfreesboro and Franklin that increased by 24.4% and 32.5% and are now priced at $353,880 and $699,289, respectively.

The median home value and rate of increase for other cities and suburbs near Nashville are as follows, according to Zillow’s home value index:

  • Brentwood: $984,856, a 33.9% increase
  • Nolensville: $622,738, a 31.5% increase
  • Hendersonville: $415,760, a 25.3% increase
  • Mount Juliet: $444,325, a 19.8% increase
  • Lebanon: $370,147, a 22.0% increase
  • Gallatin: $366,331, a 24.3% increase
  • Goodlettsville: $344,058, a 24.0% increase
  • Smyrna: $337,958, a 23.7% increase

Major Custom Home Building Cost Trends Across the Web for Nashville


As the ongoing pandemic continues to make its presence felt across the world, it continues to create adverse effects happening right now in the U.S. The residential construction market is no different with the continuous increase of prices, unemployment rate, and high median home construction prices. These three effects are the most prominent in the city of Nashville despite the high construction activity that is happening in the city. To give some perspective to the drastic increase of prices, there has been an increase of 19% for residential costs over the year with the average price of a home currently at  $375,000. This is important to remember because of the high unemployment rate the city is currently experiencing. The city is currently 4.2% below the average unemployment rate of the U.S. but has experienced a spike of a 16% increase. This has the potential to happen again because of the current economy and pandemic. Lastly, it is worth mentioning that the city’s average of $375,000 for residential construction is just $2,000 below the national average, at $377,000. With the market’s instability, inventory shortage, and high unemployment rate, the city of Nashville continues to experience what many cities are experiencing but can slowly make improvements as the country continues to recover from the pandemic. 


What Leading Custom Home Builders and Architects that Serve the Nashville Area Say


According to Alan Looney of CastleHomes, the prices per square foot varies. For high-end homes, the price per square foot can range anywhere between $375 to $500. A few unique projects of the company have prices increase to $900 per square foot. Looney emphasizes that each project is different from the other, as factors such as site condition, exterior finishes, interior finishes, and architectural condition play a significant role to the total price. 

Another firm that offered their insights is Superior Custom Homes & Remodeling. According to the team, many projects have prices that range between $275 to $372 per square foot. Other projects that are in rural areas have a much cheaper price. The firm has tackled projects in these areas with a price of around $246 per square foot. The main issue with these projects is the current inventory shortage that these firms are facing. It may take six to eight months to properly source these materials which is why the team insists on homeowners to be patient and flexible during the building process. 

DeFatta Custom Homes, a luxury home building firm, shared the estimated price of its services. The firm’s pricing is directly affected by various elements, same as CastleHomes’ criteria. According to David Defatta, Partner and Vice President of the firm, their rate ranges between $300 to $375 per square foot. This price may increase up to $350 to $425+ by next year as the industry struggles with supply chain issues and labor shortages. Nevertheless, David assures clients that their firm is working hard to excellently serve future homeowners and give the best value for their homes.


The Future of Nashville’s Residential Construction Industry

The city of Nashville is not immune to the economic effects of the pandemic. Increased prices, inventory shortages, and unemployment rates have an effect on the lifestyle and living costs of those in the area. According to builderonline.com, there is a significant increase in residential costs in 2021 with Nashville being at $250 per square foot. Median home prices have increased as well. With an increase of material and land prices throughout the entire country, many pose the question: which city is the best and most cost-effective to build and live in? With data suggesting that Nashville’s average home price is $2,000 below the national average, the city may still attract many despite the increase of costs.

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