Wood vs Steel Building Cost [Benefits & Drawbacks]

There’s nothing like starting construction on a new home or building on your property. But if you’re doing this, you need to begin by making sure that you select the correct material for the project.

Two of the most common building materials are steel and wood. And if you’re trying to decide between the two, price is going to be one of your most important considerations.

The cost of framing a 1,500-square-foot structure with steel is between $14,250 and $16,500. You can compare that to the cost of framing a 1,500 wood structure, which is between $1,500 and $7,500. That being said, wood framing has higher-finish costs. Keep reading to get a complete overview of steel vs wood building costs.

Are metal buildings cheaper than wood?

The answer to this question depends on what type of building you’re talking about. Steel homes are generally more expensive than wooden ones. A steel frame for a 1,500-square-foot house can cost between $14,250 and $16,500 in materials alone. Materials for a wooden frame of the same size would cost between $1,500 and $7,500.

But if you’re looking into building a barn or a similar outdoor structure, steel would likely be a cheaper option. For example, a steel barn will cost between $25 and $35 per square foot on average. But a wooden barn costs $45 to $65 per square foot on average.

Steel vs wood framing costs

When it comes to comparing steel and wood home-building costs, framing is the most important thing to look at. It’s where the bulk of your expenses will be with these materials. So with that in mind, let’s take a close look at steel vs. wood framing costs.

Steel framing costs, benefits, and drawbacks

Steel frames cost between $9.50 and $11 per square foot. That’s quite a bit higher than wood frames. However, steel frames have a unique set of pros and cons that may appeal to some people.

For example, steel frames are super durable. The material doesn’t warp overtime at all and it will never rot on you. That means with a steel frame, you’re basically paying extra upfront to minimize your repair bills down the road. 

Steel is also stronger than wood and isn’t flammable. These are two additional reasons why people might choose a steel frame over a wood one.

There are a few drawbacks to picking a steel frame for your home as well. Cost is obviously number one. But steel frames are also worse at keeping a home insulated than wood ones. That means homes with steel frames could have higher heating and cooling costs.

Finally, steel frames are also prone to rust over time. But wooden frames face similar problems with rotting and warping.

Wood framing costs, benefits, and drawbacks

A wooden home frame costs between $1 and $5 per square foot on average. That means you could save between $4.50 and $10.00 per square foot by choosing a wooden frame over a steel one.

There are other benefits to picking a wooden frame as well. For example, more contractors are familiar with wood than steel. So you could have a wide selection of builders to choose from. That could help you find a better fit for your needs.

Your labor costs on a wood frame will be lower as well. That’s because steel frames are more of a specialized job than wooden ones, which means that workers who put them together are paid more.

The major drawback of choosing a wooden frame is maintenance. With wood, you have to worry about moisture damage, rot, and warping throughout the lifespan of your home. 

Wooden frames are also easily damaged by insects and pests. This means you may have to spend more time and money on maintaining a home with a wooden frame.

Steel vs wood cost by size

One of the biggest factors that can influence the price of both steel and wooden homes is the size of the home that’s being constructed. The general rule is, that the larger the home you want, the more you’re going to have to pay for its frame.

To illustrate this point, let’s look at the average cost for framing steel vs wood homes by size:

Other framing charges to consider while building your home

The prices covered above show the average charges for framing a home in either steel or wood. But there are other prices that you may want to consider while making this decision as well. Here are some of the most important ones.

Labor costs ($4 to $10 per square foot)

The average labor costs for framing a home are between $4 and $10 per square foot. This is independent of the cost of the materials that you’re using.

The exact amount that you’ll pay for labor will depend on several factors. For example, homes that are built in cities with high costs of living tend to have higher labor costs for framing in both steel and wood.

Your cost will also be impacted by which builder you choose to go with. Experienced contractors often charge a bit extra in labor costs. Picking an inexperienced contractor is riskier but could save you money on labor.

Home sheathing ($2 to $8 per square foot)

The home sheathing is what keeps your home weatherproof. It’s a layer of material that goes on the outside of your frame and which prevents things like rain and snow from damaging your home. 

It typically costs between $2 to $8 per square foot to install. That’s on top of the amount that you’ll pay to frame your home in either wood or steel.

Basement framing charges ($5 per square foot)

Maybe you don’t need to frame an entire home but you want to reframe your basement. In that case, your costs should be lower per square foot — regardless of whether you’re using steel or wood.

That’s because basement framing jobs are typically simpler than home framing jobs are. The walls aren’t load-bearing and don’t require extensive planning. So if you just need your basement framed, expect to pay around $5 per square foot for the job.

Wall, ceiling, and interior reframing rates ($7 to $12 per square foot)

There’s also a different price for framing interior parts of your home then there is for framing exterior portions from scratch. The average cost for walls, ceilings, and interior sections of framing is between $7 to $12 per square foot.

These costs are a bit higher because the work is often more complex and demanding. Interior reframing projects offer less room to work and require more care to be taken about dust and debris.

Factors that can impact steel and wood prices

The costs of steel and wood for building aren’t static. Instead, they can fluctuate based on a variety of factors. So the exact amount that you’re charged to build with wood or steel can vary from one year or even one season to another.

With that in mind, let’s take a quick look at some of the factors that can influence the costs of building a home or a structure out of steel or wood.

Cost of raw materials

There’s only a limited amount of timber and iron ore in the world. And this scarcity creates periodic spikes in demands for the raw materials that go into wood and steel. When these demand spikes occur, the price of raw materials goes up and so does the price of wood and steel building materials for homes.

For example, 2021 saw a huge spike in timber prices. For a time, this meant that the cost of building a home out of wood was much more expensive than it had been.

Weather

Extreme weather events can actually have an impact on steel and wood prices as well. That’s because these materials need to be transported via ship from continent to continent. 

And the more risky or challenging that journey is the more transportation companies charge for it. This increase in cost is often passed on to the buyer.

Oil prices

Oil prices are similar to the weather in how they impact the costs of steel and wood building materials. When oil prices are high, it costs more to transport these materials. And at least some of that cost is passed on to the buyer.

Supply and demand

Supply and demand are one of the most fundamental principles in any market. The steel and wood markets are not exempt from it. 

When there’s an increase in demand for these products without a corresponding increase in supply, the price goes up. When there’s an increase in supply without a corresponding increase in demand, the price goes down.

Changing tariff policies

International trade is super complicated. But when one country institutes new tariffs on wood or steel (or something that’s related to transporting and building with them) that cost is often passed on to the buyer.

Steel vs wood barn building costs

Maybe you’re not interested in building a home out of wood or steel, but you’d like to add a barn to your property that’s made out of one of these materials. If so, let’s consider the amount that you would pay to do this and some pros and cons of using each material.

Steel barn costs, benefits, and drawbacks

Steel barns are actually cheaper than wood barns are, which is a reversal of the cost of these materials when it comes to building a home. 

In fact, you can buy a basic steel barn for as little as $1,000. But more complex steel barn structures can cost $50,000 or even more. That being said, the average person pays between $10,000 and $30,000 to build a barn out of steel.

The biggest benefit of choosing a steel barn is cost. On top of this, steel barns are more durable, require less maintenance, and can be more eco-friendly than wood barns.

The downsides of choosing a steel barn are that they aren’t usually as attractive as wood ones and they can be tougher to build. This could mean you would pay more in labor costs for a steel barn than you would for a wood one.

Wood barn costs, benefits, and drawbacks

Wooden barns tend to cost between $45 and $65 per square foot. That’s quite a bit higher than the average per square foot price of a steel barn ($25 to $35).

So, why would anyone build a wood barn instead of a steel one? Most people who choose wood barns do so because they find them more attractive than steel ones. Wood barns offer a classic look that their steel counterparts simply can’t match.

Wood barns are also easier to build. Handy homeowners may even be able to create one themselves and save a ton on labor costs.

However, wood barns are also more difficult to maintain and are much more sensitive to the elements. If you make a wood barn, you’re going to have to spend more time, money, and energy caring for it than you would if you constructed a steel barn on your property.

How to afford to build a steel or wood home

Regardless of whether you choose steel or wood for your home or barn, you’re going to need money to pay for the materials and the costs of labor. And framing your home is just one component of the broader costs of building one. 

The national average cost of building a home from scratch is $298,000. That doesn’t include the cost of land either. So, how do you afford all of this?

Most people who build homes out of steel or wood apply for a construction loan. This covers the costs of everything that goes into building your home from scratch.

Once the construction is done, you can then convert your construction loan into a regular mortgage. Or you also have the option of just applying for a mortgage on your completed home and then using those funds to pay off the construction loan.

How to qualify for a construction loan

The most important aspect of qualifying for any loan is a solid credit score. Most lenders will require a credit score of 680 or higher. But that’s not all that you’ll need. To qualify for a construction loan, you’ll need each of the following.

A sizeable down payment (25%)

Construction loans generally require a larger down payment than traditional mortgages. The absolute minimum that you’ll need as a down payment is 20% of the project’s costs. But most lenders will ask for 25%.

A qualified contractor

Before you can get financing for your project, you need to have already chosen your contractor. Part of the bank’s approval process for your loan will be to verify that the contract has all the required documentation and has a good reputation for completing projects successfully.

Detailed construction plans

Banks also want to see the details of your construction plan before lending you money. This is often called a “blue book” and it contains every aspect of your construction plan, including your timeline, floor plans, materials, and sizing specifications of each section of your home.

An appraisal

A bank isn’t going to loan you more money than your completed project will be worth. For example, if your home’s value will be $300,000, a bank won’t give you $500,000 to make it. That would be a bad investment on their part.

That’s why banks usually want an appraisal of the value of the project before lending you money for it. They ask for this mostly just to verify that your completed home will be sufficient collateral for the loan that you’re requesting.

The Bottom Line 

The average cost to build a home in the United States is $298,000. But your number could be higher or lower than that depending on whether you choose steel or wood for your frame.

Steel home frames cost more, at around $9.50 – $11.00 per square foot while wood frames can be completed for between $1 and $5 per square foot. So if cost is all that you’re concerned about, then you should almost definitely go with a wood frame.

But each of these materials has its own set of pros and cons that may appeal to different types of people. For example, steel homes are more durable and are easier to maintain than their wooden counterparts.

Ultimately, you can’t go wrong with picking either material for your home. You just need to figure out what you’re willing to pay in construction costs and assign your own personal value to the pros and cons that steel and wood offer.

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