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Shopping for your dream home can be exhausting. It’s difficult to find a pre-existing home that meets all your needs while checking off every single item on your wish list. In the end, you’re likely going to have to give up some of your must-haves in order to get into a home that works for you. That’s why some people prefer to take matters into their own hands.

While building your own home means you have full control over every aspect that goes into it, that freedom isn’t free. But with the average sales price of existing homes approaching the $300,000 mark, aspiring homeowners might be wondering if building their own home from scratch could save them a little cash while ensuring they get exactly what they want.

According to HomeAdvisor.com, an online marketplace that connects homeowners with home improvement professionals, the average cost to build a new house is a little over $290,000. But that cost can vary greatly. They go on to report that the average cost of building a house is around $147,000 to as much as $436,000. And of course there’s figures that can go well beyond the stars and moon.

All these numbers will depend on a lot of different factors, such as location and the size of the home. However, when you decide to build it yourself, you have the advantage of making all the decisions and being able to look for cost-saving opportunities. If you plan ahead and stick to your budget, you could end up building the house of your dreams for less than what you’d find on the market.

Main Steps of Building a House

If you’re just dipping your toe into the world of home construction, you may be wondering what  the project will entail. But don’t stress yourself out unnecessarily. Just take it one step at a time.

Figure Out What You Want

Before you even create a budget or start looking for land, you should get an idea of whether the house you want is the one you can afford. Deciding on a few basic factors will help you start to get an idea of how much money you’ll be spending. These include things like build type, location and size.

For many people, building their own home means working with an architect to get exactly the design and construction they want. However, custom homes can cost between $100 – $400 per square-foot according to HomeAdvisor. For an average 2,500-square-foot home, that can get expensive.

For a more cost-conscious choice, you might consider buying into a housing development. With this option, you work with a housing developer or builder who offers you a limited number of floorplans,  add-ons or upgrades to choose from. You get some amount of customizability at a lower cost; buying into a development can save up to 15% on home building costs, according to HomeAdvisor.

Prefabricated homes can cost even less. These homes are manufactured offsite and then the pieces are assembled on location, making construction much speedier than with a regular home. And while they may cost less, prefab homes can be just as beautiful as stick-built homes that are built onsite.

In addition to figuring out what build type you’d like, think about how large you want your house to be and where you want to build it. Bigger houses obviously cost more, and some areas will be more affordable to build in than others. Do your research to determine what will fit with your needs and expected budget.

Create Your Budget

Once you’ve decided what you want, your next step should be creating a master budget.

To build a budget, you’ll need to do research and get estimates from building professionals. A good, well-researched budget will keep you on track throughout the process and prevent you from starting something you can’t finish.

Buy the Land

When looking for the perfect plot of land to build your home upon, you want to consider whether the location makes sense for you. Is it close enough to the town center? Is the lot itself easily accessible? Are home values in the area similar to your projected home value?

Hire Your Professionals

If you’re building a completely custom home, it may make sense for you to hire a general contractor who will coordinate all the subcontractors and legal aspects needed to complete the job.

You’ll probably also want to hire an architect, or at least set up a consultation with one, once you’ve developed your blueprints.

Make sure all the professionals you hire are properly licensed and have good reviews or references.

Develop Plans

If you’re opting for a prefab home or a development home, figuring out your plans will be a little more clear cut. If you plan to create a custom home, you’ll need to spend some time with an architect to make your vision a structurally-sound reality.

Get Your Paperwork in Order

To get your house built, you’ll need permits, permits and more permits. This is where it can be invaluable to have a general contractor on the job; they’ll take care of this for you, as well as any inspections that need to be performed.

Purchase Insurance

While your contractors will likely have insurance of their own, purchasing your own insurance to cover the project will protect you financially if anything goes wrong.

Begin Construction

Several different teams of professionals will take turns doing their part to turn the vacant property into a home. This part of the process could take between three to six months or longer, depending on weather and other factors.

The Final Inspection

Before you can move in, an inspector will need to take one last look at your home to certify that it has been built according to plan, is up-to-code and suitable for inhabitants.

Don’t Forget the Yard

Once the house is built, you’ll probably want to get started on the landscaping, including seeding the lawn and planting foliage.

Home Building Cost Breakdown

The total cost will vary, but as we already mentioned it will likely cost you at least a couple hundred thousand dollars to get your home built. While the total might give you some sticker shock, seeing what all goes into it may make it easier to digest.

Keep in mind that these are all average ranges. You’ll likely find at least a few of these project-cost areas are more or less than projected.

Item Cost
Land Varies
Site Work (clearing trees/structures, other preparation) Varies
Floorplan $1,800 – $5,000
Foundation $5,000 – $8,000
Framing $20,000 – $50,000
Exterior Finishes $40,000 – $60,000
Major Systems (electrical, plumbing, HVAC) $20,000 –  $40,000
Interior Finishes $70,000 – $80,000

Land: Cost Varies

To build a house, you’ll first have to purchase a vacant lot to put it on. How much this will cost depends on a lot of different factors – size and location being the main ones – so the price could range anywhere from a few thousand to a hundred thousand dollars, or more.

Site Work: Cost Varies

Once you’ve got your land, you’ve got to get it ready to house a home.

First, the land will likely need to be cleared and prepared to build on, which can cost between $1,000 -$4,000. If an existing structure needs razing or any ruins need hauling away, this cost most likely will be considerably higher.

If it isn’t already, the lot you choose will need to be hooked up to utilities. The cost of this will depend on your proximity to utility hookups as well as the city or town you reside in, as every area has different average prices for these services. The total could cost anywhere from a few thousand to tens of thousands of dollars.

Additionally, if you aren’t able to connect to city water or sewer systems, you’ll need a well – the cost of which can range between $1,500 – $12,000 – and a septic tank, which can cost between $3,000 – $9,000.

To get a good estimate of how much this all will cost you, find out what services you’ll likely need then do research and get quotes for the land you plan to build on.

Floorplans: $1,800 – $5,000

Now you need to develop the vision you have for your home. If you have an idea of certain elements that you want but aren’t quite sure how to put it all together, or are planning on building a large or complex home, it may make sense to hire an architect to help you create a blueprint for your future home.

Hiring an architect will cost, on average, around $5,000.

However, if you’re pretty clear on your vision for your home or just want something simple, you may be able to work with a drafter instead, which tends to be less expensive – around $1,800 on average.

Working with someone who has a lot of experience and understands your dream can be a worthy investment. Having all the details and being confident in your design before breaking ground can save you from having to make a change order – a request to change something in the predetermined plans – in the middle of the project, which can be expensive.

Foundation: $5,000 – $8,000

Three of the most common types of home foundations are concrete slab, crawl space and basement foundations. Slab tends to be the cheapest option, followed by crawl space and then basement.

Slab is pretty much what it sounds like: a slab of concrete that your house rests on. A crawl space foundation lifts the home a few feet off the ground leaving room to crawl underneath the house. Basement foundations add room to your home, and as such are more expensive to build.

On average, building a foundation will cost around $8,000, with prices varying depending on what type you go with. A simple concrete slab could be closer to $5,000, while a fully-finished basement could cost upwards of $100,000.

Framing: $20,000 – $50,000

Once the foundation is built, the framing crew will come in and start constructing the skeleton – or “the bones” – of your house.

Framing will make up a good chunk of your home building budget. For a single story home, the cost can range between $20,000 – $50,000.

Exterior Finishes: $40,000 – $60,000

Now, your team is going to start making the plain-looking wooden structure look like a home. This means adding siding, a roof, windows and doors.

This can average around $50,000, another significant piece of your building budget.

Major Systems: $20,000 – $40,000

While your house may be starting to look like what you envisioned from the outside, it still has a ways to go. At this stage, your team of professionals will be working to get your house humming with air, electricity and plumbing.

An electrician will wire your home and get you connected to power. This will cost, on average, $10,000.

The cost of setting up your home’s HVAC system will depend on the type of system you’re installing, but can cost between $4,000 – $12,000.

Costs for plumbing installation can range between $7,000 – $15,000.

Interior Finishes: $70,000 – $80,000

Interior finishes are like the icing on the cake; they cover up all the stuff happening within the walls – e.g., plumbing, electrical, HVAC – and make it look professionally polished. This includes the less-fun but necessary aspects of your home’s interior, such as insulation and drywall, as well as all the fun elements you’ve most likely been looking forward to picking out, including paint, flooring and cabinetry.

How much this step costs depends on the quality of the materials you choose, and can end up costing between $70,000 – $80,000, or more.

Additional Costs

That’s a basic rundown of all the essential elements you can expect to pay for when building a home, but there are plenty of other additions you can make, if your wallet can handle them.

A basic asphalt driveway typically costs around $800 – if you want something fancier, larger or longer, expect to pay more. If you want that driveway to lead to an attached garage, that’s another $7,500 at the low end – you’ll pay more for additional car space.

Then, there’s landscaping. A basic sod installation may cost around $1,000, and the cost rises from there based on the contour of the land and complexity of your vision. If you’re thinking about adding a deck or porch, that can cost between $15,000 – $20,000.

Can You Afford to Build a House?

While building your own house can be rewarding, it’s not something to take lightly. Not only is it an expensive endeavor, it’s also a time-consuming one, and you need to think seriously about whether you’re able to give a project of this magnitude the time and attention it deserves to do everything right.

It’s hard to compare the cost of building a house to buying one because there are so many different factors involved. That’s why it’s important to do research and figure out what the housing market is like in your area compared to the costs involved in building a home.

If the costs are similar and you don’t feel up to taking on a big project, you may find that purchasing a home is a better option for you. However, if you’ve decided it makes sense cost-wise, and you love the idea of being able to live in a home that you helped create, it could be worth all the time and effort involved.

If you decide to embark on your own home-building adventure, you’ll likely need financing. Construction loans are available to get your house built, and serve as short-term loans that help you afford the costs of construction. Then, you can get a mortgage to pay off the debt.

Did you build your house? We’d love to hear from you! Share your experience with us in the comments below.

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