If you’re in the market for a home, then you’ve definitely heard the rumors.
And you’re wondering, “Why would I buy an existing home if I can have my dream home at a lower price? Is it cheaper to build a house, really?”
Look no further than our guide below on what to expect financially from building or buying your own home.
Is It Cheaper to Build a House?
The short answer is that sometimes it’s cheaper to build, but not always. In order to compare the cost of buying a home vs. building one, we have to consider the costs associated with building a home from the ground up.
The NAHB’s (National Association of Home Builders) construction cost survey found that the average cost of building your own home was $237,760.
They broke the cost down into these categories:
- Site Work (permit fees, inspections, engineering, etc.) $15,903
- Foundations (excavation, foundation, concrete, etc.) $25,671
- Framing (framing, trusses, sheathing, etc.) $41,123
- Exterior Finishes (outside walls, roof, windows and doors, etc.) $33,066
- Major Systems (HVAC, plumbing, electrical, etc.) $32,746
- Interior Finishes (insulation, drywall, painting, flooring options, appliances, furniture, etc.) $67,939
- Final Steps (landscaping, driveway, patio, cleanup, etc.) $16,591
- Other (miscellaneous) $4,722
Consider the Land
Another cost you have to consider is the land you build on, which is not included in the total $237,760 above.
Depending on the size and location of the land, a plot cost can vary widely. The average builder spends about $90,000 for a piece of land.
So if your expenses follow the average, the total cost to build your own home will end up costing you a little less than $350,000 all things considered.
How to Save
The great benefit to building your own home is that you can be in control of ways to save money.
For example, if you are brave or skilled enough to tackle some of the construction DIY style, then you can save a lot of money in labor costs.
For the projects you don’t want to do alone, finding skilled contractors who are affordable is another way to control the cost of your build. Search here for the best electromechanical companies near me.
Another way to save is on the plot of land. Choosing a more rural plot or a smaller size can substantially reduce the cost.
By partnering with the right contractors and taking on a few projects yourself, you can save a lot of money and get the house you love.
Costs Associated with Buying a House
The current average cost of an existing home is $289,000 in the United States.
But if you’re like most homebuyers, an existing home will need some updates and renovations before it truly feels like home. And with the average home renovation project costing $45,000, the price of an existing home can really add up.
Regardless of whether you’re building or buying, you’ll likely need to invest in new furniture and appliances, which average around $10,000
If you purchase an existing home and your renovation, furniture, and new appliances, the cost of an existing home puts you around a total of $350,000.
Some Final Considerations
Although the average costs end up being about the same, there are a few other factors to consider before asking “is it cheaper to build a house?”
Consider these questions:
- Do I have any skills that I could use towards DIYing some aspects of my home build?
- Do I have the time it takes to build a home (average 6.5 months)?
- Do I want to live with someone else’s dream floorplan or create my own?
Answering those questions can help you determine if building or buying is right for you! Want to learn more? Check out our home blog.