Whether you want to design your dream home or just cannot find what you want in the area where you want to live, there are many reasons why you may want to consider building your home. Building a home provides the ability to have control over the space, how it looks, and its layout.
But building a home can be a challenging and complicated process, including determining the costs. The finished interior space is only one portion of a home, so when calculating the total price, be aware of the unfinished space, including garages, decks, and driveways. The type of home built and building it can also impact costs, with modular homes and custom homes having different price points than stick-built homes. The average cost to build a 2,600 sq. ft. single-family home in the U.S. ranges from $240,000 to $710,000, with most homeowners spending around $423,800 for the job. The low cost for this project is $140,000 for a 2,600 sq. ft. builder-grade home with no changes. The high cost is $1,000,000 for a 2,600 sq.ft. custom-built home with high-end materials, three-car garage, covered deck, and landscaping.
The average cost per square foot to build a new home varies depending on multiple factors. This is due to how a builder calculates the price per square foot. For example, some builders add in the costs for landscaping, while others add costs for the finished space at full cost, basements and garages at half cost and outdoor areas like decks at quarter cost.
For this reason, areas that do not have basements have a different price per square foot than homes in areas that have basements. Also, homes with attached garages have a different square foot cost than homes without them. The cost of building materials and how easy the ground is to build on also impacts the square foot price. The national average is around $163 a square foot.
Custom Home Costs Breakdown
There are a thousand different variable costs associated with building a house. For example, are you building a coach house? A bungalow? A 3-story townhome? A modular home? A triplex? A mansion? Each of these asset classes will have different price points.
Generally speaking, here are the variable costs associated with building any kind of house. This cost breakdown includes estimated averages from the NAHB, which are from 2019, so keep in mind that costs will likely increase in the future.
- Building permits and fees: Before you break ground, you need to get approval from and pay your local jurisdiction. You may also need a land survey. These are permit and development fees. Cost: $18,323 (6% of construction cost).
- Excavation and foundation: If you’re going below grade, you’ll need to dig, or maybe you’re building a concrete foundation. Cost: $34,850 (11% of construction cost).
- Frame: This includes the cost of lumber and trusses that make up the shell of your property. Cost: $51,589 (17% of construction cost).
- Exterior finishes Roofing, siding, windows, and doors. Cost: $41,690 (14% of construction cost).
- Major house systems: Plumbing, HVAC, and electrical work. Cost: $43,668 (14% of construction cost).
- Interior finishes: This is a highly variable cost, but it includes what you would traditionally associate with a new-build home, including insulation, drywall, countertops, painting, lighting, cabinets, flooring, appliances, and the list goes on. The interior finish is the highest variable cost you can control. Cost: $75,259 (25% of construction cost).
- Final finishes: These are the variable building costs associated with what’s typically referred to as curb appeal: landscaping, deck, patio, and driveway. Cost: $20,116 (6% of construction cost).
There are many other variable costs typical of most home sales but may not apply to your situation. It is worth considering these secondary costs to building a house:
- Contractors: Unless you’re building the new house yourself, you’re going to need to consider the labour cost at various stages of your build. This includes electricians, framers, plumbers, roofers, and so on. You may be able to find a builder who can do all of the builds, which will cut down on costs.
- Marketing: Are you selling the new home you’ve built? Or are you going to rent it out? Both of these require some cost to market the property for sale or rent.
- Land: Keep in mind that the above doesn’t include your land. If you still haven’t acquired a properly zoned lot, be sure to account for land cost in your home-building estimate.
- Cleanup: New-home construction is messy, and you’ll have to pay for the cleanup when everything is done.
- Architectural drawings: If you don’t already have a legal architectural drawing or floor plan, your local municipality will likely require one for their approval of your new home build.
- Financing: Are you using construction financing from a lender to fund your build? There will be a number of fees and interest costs associated with financing the build of a house.
- Inspections: Before, during, and following your build, you will likely be required to adhere to certain inspections from your local municipality, which will cost you money. Further, you may want a home appraisal inspection completed following your new home build to get a benchmark of the value of your property.
Building vs. Buying
Here’s the big question that looms large in the mind of prospective home builders: Will I save money by building my own home? The answer is, unhelpfully, a resounding “maybe.” In 2019, according to the Census Bureau, the average cost to buy a single-family home was $383,900. That’s substantially more than the $280,000 to $310,000 average for building a home, but these prices aren’t as straightforward as they might appear. So here, we’ll break down the financial pros and cons of buying an existing home vs. building your own.
Advantages of Building
Customization comes with many advantages, including the fact that you’ll only pay for what you want. For example, an existing home in the right neighbourhood might come with premium features that you don’t care about, like a finished basement or a swimming pool, but that factor largely in the purchase price. Additionally, when you build to your specifications, you won’t need to think about paying for renovations when you move in.
Building new also means new appliances and systems, which means everything is still under warranty when you move in. So you won’t have to figure high maintenance costs into your budget for several years to come. New heating equipment and building materials are also substantially more energy-efficient, saving you heating and cooling costs.
Advantages of Buying
For many people, buying an existing home may be worth it just for the reduced hassle, but it also has financial benefits. Perhaps most notably, land and landscaping are included. Yes, the NAHB reported the average building cost to be $296,652, but that’s not including the $89,540 for a finished lot, bringing the total price for new construction to $386,192—comparable to the price of buying an existing home.
Additionally, existing homes come with mature landscaping, including trees and other greenery that can save you quite a bit on air conditioning costs if you live somewhere warm. Finally, when you buy a home, you have context for the sale price of the house. You can see whether it has appreciated or depreciated over time to help you predict the value it will have in the future. You have to hope your location and design choices aren’t part of a short-lived fad with new home construction.
There’s a lot to take into account when deciding whether to build your own home. However, there’s plenty of information out there, including real estate calculators, that can give you a more specific estimate of cost-per-square-foot to build in individual zip codes. In addition, a little bit of research can give you a better picture of what you’re committing to financially.
8 Things Buyers Crave In A Luxury Home
Every homebuyer has a wish list. But when you’re shopping for a luxury second home, you can dare to dream big. Here’s our dreamy list of crave-worthy luxury home features — plus peeks inside some ultra-luxurious Pacaso homes.
The ideal location
Ask a luxury home buyer about their dream second home destination, and you’ll get a wide variety of answers. Many prefer to be near the water, whether that means an oceanfront stunner or a cozy lake cabin. Others desire a mountain escape, perhaps with ski-in, ski-out access to their favourite winter resort. Still, others want a second home in an area where they can pursue their favourite hobbies — think a golf resort home, a retreat in wine country, or an urban loft near restaurants and entertainment.
An open floor plan
There are many advantages to a second home with an open floor plan. Modern, open floor plans allow plenty of natural light to enter the home and give the main living area an oversized, airy feel. Open floor plans are also great for entertaining. Picture yourself cooking a gourmet dinner for your guests while they relax in the living room or on the adjacent patio.
Outdoor living
Ample outdoor space is a must-have for true luxury living. After all, when you buy a home in a gorgeous destination, you want to be able to soak up the stunning views from every possible vantage point. Expertly designed luxury homes seamlessly connect indoor and outdoor spaces. On the wish list may be folding patio doors that give you a full wall of windows when the weather’s not so great and inviting indoor-outdoor space when the sun is shining. Swimming pools, hot tubs and outdoor kitchens top the list of luxury home features for many people shopping for second homes in warm-weather destinations. If you enjoy an active lifestyle, a tennis or basketball court, putting green or bocce ball court is an add-on worth considering.
Paso pick: Why stay inside when you can bask in a tropical breeze beneath a row of palm trees? Relax, cook, dine and entertain al fresco in this luxury Fort Lauderdale home.
A gourmet kitchen
Nothing says luxury, quite like a gourmet kitchen. Homeowners who love to cook and bake will likely have a few key kitchen features on their wish list: professional-grade appliances, graciously sized islands and custom cabinetry topped with quartz, granite, or marble. Of course, luxury add-ons like wine and beverage fridges, espresso stations and smart home connectivity are nice, too.
A spa-like bathroom
A bathroom is so much more than a place to get ready in the morning. In a luxury home, it’s more like a five-star spa. Today’s luxury home buyers crave the types of amenities that help them relax, unwind and pamper themselves. Steam showers, freestanding soaking tubs, designer lighting and heated floors are just a few of the most popular luxury home features buyers crave.
Space for entertaining
Time spent in a luxury home is even better with friends and family. Homebuyers in the luxury market are looking for ample space to entertain, both indoors and outdoors. What kind of space that is depends on the buyer’s idea of a good time. Is it a gourmet dinner party in a sophisticated dining room? A wood-fired pizza night outdoors by the pool? An afternoon was I spent in the game room for some friendly competition?
Paso pick: Give your dinner guests an A-list experience at Emerald, with a stunning dining table and massive island to provide formal or cocktail seating for your most special friends and family.
Home automation
Whole-home systems make luxury living easier, safer and more convenient. A smart system can be programmed to adjust the temperature, lighting, and security for when you wake up, when you arrive home and when you go to bed—staying up late? Make changes effortlessly through an app or smart speaker. Other smart luxury home features include whole-house speaker systems and central vacuums. Home automation provides the convenience and eases many luxury home buyers crave.
Paso picks: Our smart-tech-enabled homes provide you with comfort and convenience for a more effortless ownership experience.
Ample storage
A place for everything and everything in its place. From Pinterest-worthy walk-in closets to pantries designed for serious chefs, storage is key, even in a second home.
Paso picks: Every Pacaso has dedicated, secure storage space so you can leave some of your belongings in the home even when you’re not using it. And at Shadybrook, there’s no need to pack light with this dream closet and dressing room for all your favourite dresses.