How Much Does a New Furnace Cost? Equipment, Installation and Replacement Explained

Last updated October 8, 2026 | By Michael Haines, Founder, AC Direct

A new furnace's cost is the equipment price, set by BTU size, AFUE rating and burner type, plus an installation that depends on venting, ductwork, electrical and local labor. The equipment is a fixed number you can see on a product page; the installation is where the range comes from.

Furnace pricing is one of the most frustrating searches on the internet. Half the results quote a tidy national average and move on, as if a 1,100 square foot bungalow in Phoenix and a 2,800 square foot colonial in Buffalo shop in the same universe. They do not. The question we can actually answer is what drives the number, and that is the whole point of this article.

If you want to start putting a real figure together while you read, our live gas furnace prices page shows current equipment pricing by model. That is the fixed half of the project. The variable half, what your installer charges, has to be quoted at your house by the person doing the work. AC Direct ships the equipment; your own licensed installer handles the labor side and bills you separately. That split is the single most useful thing to understand before you read another quote.

What decides what a new furnace costs?

A furnace quote has two halves. The equipment half is driven by heating capacity in BTU per hour, the AFUE efficiency rating, the burner's staging (single-stage, two-stage or modulating), the blower motor type, and the brand tier. The installation half is driven by venting, ductwork, electrical, gas line work, permits, access and regional labor rates.

The equipment half you can look up. The installation half is site-specific. That is why a careful breakdown separates the two from the start, and why equipment cost and installed cost are two different conversations. A homeowner who treats them as one line item ends up comparing quotes that are not actually comparable.

What moves the number

Below is the structure of a furnace quote in one view. Direction of impact is noted for each factor so you can read your own quote with the right questions in hand.

Factor	Side of the Quote	Direction	Why
BTU output band	Equipment	↑ with size	Larger heat exchangers, bigger blowers, bigger cabinets. AHRI certifies Output Heating Capacity in MBtu/h as a published rating for furnaces.
AFUE tier	Equipment	↑ with efficiency	Higher-AFUE condensing furnaces earn the ENERGY STAR label at 95 percent AFUE (South) and 97 percent AFUE (North).
Single-stage vs two-stage vs modulating	Equipment	↑ with stages	More burner control hardware and more sophisticated gas valves.
Blower motor type	Equipment	↑ for variable-speed ECM	ACEEE documents that two-stage furnaces with BPM (ECM-type) blowers deliver electricity savings.
Brand tier	Equipment	Varies	Features, warranty and distribution model, not combustion physics.
Venting changes	Installed	↑	Switching from a metal B-vent to PVC intake and exhaust for a condensing unit means new pipe runs and condensate drainage.
Duct modifications	Installed	↑	Plenums, transitions, sealing and insulation. Attic and crawlspace ducts leak heat before it reaches the room.
Electrical	Installed	↑ sometimes	Dedicated circuits or panel capacity for variable-speed blowers.
Gas line	Installed	↑ sometimes	Resizing or re-routing if output or location changes.
Permits and inspection	Installed	↑	Jurisdiction-specific. Not optional.
Location and access	Installed	Varies	Regional labor rates, and whether the furnace lives in an open basement or a knee-wall attic.
Season	Installed	Varies	Peak-cold demand compresses schedules and firms up pricing.
Old unit removal and disposal	Installed, replacements	↑	Dismantle, haul and dispose. Not present on a first install.

How does size (BTU) change the price?

Furnace equipment cost rises with heating output. A larger furnace uses a bigger heat exchanger, a larger blower assembly and a bigger cabinet, which raises materials cost. When you compare two models, use the AHRI-certified Output Heating Capacity in MBtu/h rather than the input number on the nameplate; it is the published rating used for apples-to-apples comparison.

Bigger is not better. An oversized furnace short-cycles. The thermostat calls, the burner fires at full tilt, the air warms fast, the thermostat satisfies, the burner shuts off, and the house drifts cool again a few minutes later. The equipment spends most of its life in the startup phase, which is the least efficient and the hardest on parts. The thermostat is not lying. It has limited jurisdiction over a furnace that was never sized for the house.

Undersized is worse in the opposite direction. The furnace runs continuously on the coldest nights and still cannot hold the setpoint. Proper sizing is a Manual J calculation, not a guess from square footage. More on that below.

How does efficiency (AFUE) change the price?

AFUE is the share of the fuel's energy that becomes space heat over a heating season. Higher AFUE means less fuel out the flue, and it also means more expensive equipment to buy. The jump happens in the condensing range, where a second heat exchanger, a sealed-combustion intake and a condensate drain all enter the picture.

Most of the market now sits in two tiers: non-condensing units in the low 80s on the AFUE scale, and condensing units in the mid-90s and above. To earn the ENERGY STAR label, a gas furnace needs 95 percent AFUE in the US South and 97 percent AFUE in the US North. The high efficiency furnaces category covers that upper band.

And here is the part the brochure does not want to say out loud: a high-efficiency furnace feeding a leaky attic duct system does not deliver high-efficiency comfort. Engineering can only forgive so much. The 80 versus 95 AFUE decision deserves its own look because the right answer depends on climate, fuel price and the condition of your ducts, not on which number is higher.

How do single-stage, two-stage and modulating compare on cost?

Single-stage furnaces are the least expensive to buy. Two-stage units cost more. Modulating units cost the most. The staging describes how finely the burner can match the heating demand, and more precision requires more hardware.

Think of it the way you'd think about a car engine. A single-stage burner has one setting: on at full output, or off. Two-stage adds a lower setting the furnace uses most of the time, stepping up only when the house asks for more. A modulating furnace adjusts output continuously along a range, more like a dimmer than a switch.

What that looks like at the thermostat

Single-stage runs at full output whenever it fires. Two-stage runs mostly on the lower setting and only steps up when demand builds. A modulating burner slides along the demand curve. ACEEE's work shows that two-stage furnaces paired with BPM (variable-speed) blowers deliver measurable electricity savings compared with single-stage units on PSC motors.

Comfort is where the gap shows up most clearly. A single-stage furnace heats in bursts; a modulating furnace holds a line. If you have ever noticed the house swing two or three degrees between calls, that is a single-stage signature. The single-stage versus two-stage comparison gets into the trade-off in more detail.

We sell inverter and modulating equipment. We still believe you should buy the system that makes sense for your home. A compact, well-insulated house in a mild climate often has no business paying for a modulating furnace it will never fully use. A large multi-story house with uneven exposure usually does.

What does installation add, and why does it vary so much?

Installation is the labor and materials to put the equipment into your house safely and to code. The range is wide because every house is different, and because an HVAC business is paying for more than hourly wages when it quotes labor: wages, benefits, trucks, insurance, licensing, training and overhead all live inside that number.

With that in mind, here is where the variation actually comes from.

Venting

A high-efficiency condensing furnace vents through PVC, not through the old metal flue. The exhaust gases are cool enough to condense, which means new pipe runs, a condensate drain, and often a sealed-combustion intake pulled from outside. That is a real afternoon of work, and sometimes a day. The old flue typically has to be capped.

Ductwork

Ducts outside the conditioned space, in a vented attic or an unconditioned crawl, bleed heat the moment the furnace fires. Sealing, insulating or re-routing those runs is where real-world performance gets made or lost. A new furnace may also need a new plenum or a new transition to match its cabinet. Running and working hard are not the same thing.

Electrical, gas and permits

Variable-speed blower motors sometimes need a dedicated circuit. If the new furnace's input differs from the old one, the gas line may need resizing. Permits and inspection are not optional in any US jurisdiction worth living in, and the fees roll into the quote. Access matters too. A furnace in an open basement near a floor drain is a different job from one wedged into an attic knee wall over the garage.

A current-year labor range for the installation side

Current published cost data from HomeGuide puts installation labor for a standard furnace replacement at $1,500 to $3,500 or more, at hourly rates of $75 to $150, and most installs finish in a day. Condensing conversions, duct modifications and attic installs push it higher, and so do venting, electrical or gas line work. The equipment ships from AC Direct on top of that and is billed separately through the product page.

What does a replacement cost that a first install does not?

A furnace replacement carries costs a first install does not: removal and disposal of the old unit, adaptation to pre-existing ductwork, venting and gas lines, and whatever surprises those systems hand to the technician on the day. The furnace is new; the house around it is not. Replacing a furnace walks through the full sequence.

The common surprises:

• The old B-vent chimney cannot be reused for a condensing furnace, and the new PVC runs have to find a path outside through finished space.
• The existing plenum does not match the new cabinet, so sheet metal has to be fabricated on site.
• The electrical panel does not have a free breaker, so an electrician gets called mid-install.
• The condensate drain has no gravity path to a floor drain, so a condensate pump gets added.
• The ducts are undersized for the new blower, so the quote reopens.

None of this is a contractor padding the bill. These are the moments where a replacement stops being a swap and starts being a project. The honest quote names them in advance where possible and flags them as conditional allowances where it cannot. A quote that pretends none of them exist is the one to worry about.

Gas furnace vs electric furnace: which costs less to buy and to run?

A gas furnace generally costs less to run on fuel in US regions where natural gas service is available. ACEEE's life cycle work finds that gas furnaces carry the lowest life cycle cost in most regions studied. An electric furnace (electric resistance, not a heat pump) has a simpler cabinet, but its operating cost tracks the local electricity rate, which in most markets runs well above the per-BTU cost of gas.

Electric resistance is honest in one way: every unit of electricity that goes in becomes a unit of heat. There is no combustion loss. The problem is the price of that electricity relative to the price of gas per useful BTU delivered. For a reader whose real question is lower bills on electric service, the correct comparison is not electric resistance versus gas; it is a heat pump versus gas, and that comparison lives in its own article.

Where electric furnaces earn their keep: homes without a gas line, backup heat behind a heat pump, mild-climate zones with cheap electricity, and manufactured homes where a Revolv-style package makes the layout easy.

How do you get a real number for your own house?

The only honest number for your house comes from two things: a Manual J heating load calculation to size the equipment, and an on-site assessment of your ductwork, venting, electrical and gas service to scope the installation. Everything else is a guess dressed up as a budget. Collect two to three detailed quotes that each break out equipment and installation separately, and read them against the table higher in this article.

A workable process

1. Look up current equipment pricing on the gas furnace page to anchor the equipment half of the budget.
2. Have an installer run a Manual J for your house. Not square footage times a factor. An actual load calc.
3. Ask each bidder to break the quote into equipment, venting, ductwork, electrical, gas, permits, removal and labor. Line items, not a bundle.
4. Ask what is included and what is a conditional allowance (code upgrades, surprise sheet metal, condensate pump).
5. Confirm the AFUE and stage selection match the comfort and bill expectations you actually have, not the top of the brochure.

If a quote cannot survive that process, it was not a quote. It was a guess with a logo on it.

Where AC Direct fits

AC Direct sells the equipment. Our Goodman furnaces carry the AC Direct Price Promise, and current pricing shows live on each product page so the equipment half of your budget is never a mystery. Your own licensed installer handles the labor side and bills you directly. That split is the whole reason the equipment number can stay honest; nothing on our side moves when your attic turns out to have asbestos tape on the ducts.

Furnace guides by question

Cost is where most furnace questions end up, so this page is the front desk for the rest of the furnace library. If the number above raised a new question, one of these probably answers it. If none do, the phone number at the top of the page has a person on the other end. For the decisions in order, from fuel and size to efficiency and venting, start with the complete furnace buying guide.

How furnaces work

• How a gas furnace works, start to finish
• What a condensing furnace is
• Furnace heat exchangers, primary and secondary
• How furnace ignition works
• What makes a furnace high efficiency
• What AFUE means

Choosing and installing

• Single-stage, two-stage and modulating furnaces compared
• 80% vs 95% AFUE
• Oversized vs undersized furnaces
• Furnace venting: what your house allows
• Multi-position furnaces
• Upflow, downflow and horizontal furnaces
• Putting a furnace in the attic
• The furnace condensate drain
• Propane vs natural gas
• Electric vs gas furnace
• Furnace vs air handler
• Furnace vs boiler
• Choosing a mobile home furnace
• How to judge a furnace brand

Cost and buying

• Furnace equipment cost vs installed cost
• Replacing a furnace
• Furnace financing
• Repair or replace your furnace
• What drives electric furnace installation cost
• What a furnace tune-up costs and covers

Problems and repairs

• Most common furnace problems
• Furnace not turning on
• Furnace won't ignite
• Gas furnace blowing cold air
• Furnace keeps shutting off
• Furnace smells like burning
• Cracked heat exchanger
• Furnace pressure switch
• Furnace inducer motor
• Furnace control board
• Furnace rollout switch
• What a limit switch error code means
• Replacing a furnace blower motor
• How to relight a furnace pilot light
• How often to change a furnace filter
• The furnace maintenance checklist

Frequently Asked Questions

The furnace does not decide what your project costs. Your house does, and the installer who reads it correctly.