There's quite a bit of difference between $165,000 and $475,000. The question is: why the disparity? The answer: tons of things, all of which we'll review below.

Square Footage

The most prominent factor when it comes to building costs is square footage. Simply put, the more square footage a home possesses, the more it's going to cost to build. This stands to reason, as a mansion is obviously going to be more expensive than a shack.

As was stated above, each square foot that a house possesses adds between $150 and $250 to the total cost of the house. So, if a home is 1,500 square feet and was built at a rate of $175 per square foot, it will cost $262,500.

Materials Used

While the structures of different homes are built with the same materials (wood and concrete), the rest of the materials used in these homes' constructions differ from one another. And as you might expect, this difference in materials can have a seismic effect on price.

For instance, if one home has a metal roof while the other has asphalt shingles, the home with the metal roof is bound to be more expensive than the one with the asphalt shingles. Why? Because metal roofing is a great deal more expensive than asphalt shingles.

Some other components whose materials affect building costs include flooring, countertops, cabinets, and siding. Small differences in finish have an effect on cost as well, though not to the same extent.

House Design

Another factor that can affect the cost of construction is the house's design. If a house has a simple design, it will be much cheaper to construct than a house with a complex design.

This is due largely to the fact that simple designs can be drawn up and implemented in much less time. Less time equals less money spent.

However, material waste comes into play as well. When a home possesses a complex design, materials must be trimmed to accommodate it. This trimming can result in substantial waste, all of which equates to money being flushed down the drain.

Lot Price

You have to build the house somewhere, and, like the house, that "somewhere" has to be paid for by you. Depending on where you live, a land lot can cost anywhere from a few thousand dollars to hundreds of thousands of dollars. Make sure to factor this into your building cost.

Construction Rates

When you're paying to build a house, you're not only paying for materials. You're paying for labor as well. And because the cost of labor can vary wildly from construction crew to construction crew, the construction crew you choose can have a large effect on the cost of your project as a whole.

For this reason, it's important to compare different companies' rates against one another. In doing so, you could end up saving substantial amounts of money.

Note, though, that it's not typically wise to choose the company with the absolute cheapest rates. Companies with exceedingly cheap rates often come with baggage. For instance, they might provide low-quality work or use low-quality materials.

Construction Site Accessibility

One last factor to take into account is construction site accessibility. Simply put, the easier time a construction crew has of getting to the site of your house, the less money you'll have to pay to the construction crew throughout the course of the project.

So, if you're building a house in the middle of a suburban neighborhood, you'll generally end up paying less than you would if you were building a house in the middle of nowhere.