In 2019 alone, builders started around 1.3 million new homes. It’s a big event for any family or individual. After all, you typically spend months checking on the progress, watching walls go up, and finally watching the interior come together.
That holds true whether you get a production home or build a custom home. Of course, there are crucial differences between production and custom homes. The process differs and, more importantly for most people, you will see a substantial price difference.
That begs the question of how much building a custom home costs. Before we jump into costs, though, let’s take a look at what a custom home is and factors affecting price.
What Is a Custom Home?
A custom home is one that you take an active hand in designing. In most cases, you work with an architect to create a floor plan.
Then, you hire a contractor for the actual build. If you’re wondering about how to pick a good builder, you can read more here.
You provide or acquire the land for the home ahead of time. You make most major decisions about interior materials, such as flooring and lighting.
Factors that Affect Custom Home Pricing
One of the key factors that affect custom home prices is the materials. Custom home builders must order standard materials on a project by project basis. That means they pay more for materials than production home builders because they order in smaller volumes.
The size of the home will naturally play a role in the final price.
Your location will impact overall cost, as land prices vary by region and proximity to major urban centers. Specialized materials or construction needs will also drive up the price.
If you opt for marble or granite countertops, for example, that drives up the cost of your kitchen a lot. Maybe you want solid mahogany flooring. You can get it, but expect to pay a premium.
How Much Is a Custom Home?
Since the factors affecting price with custom homes vary by location, no one number covers all the bases. In general terms, you can expect a cost that is around double that of a production home in your local area.
So, if a 2500-square foot production home will run you $150,000, a similarly sized custom home will run about $300,000. In terms of cost per square foot, it typically runs in the $200-$400 range for custom homes.
Getting the Right Pricing When You Build a Custom Home
Getting the right price when you build a custom home typically means some sacrificing. You may sacrifice some square footage so you can afford nicer flooring. You may put off a finished basement so you can get a nicer kitchen.
If you aren’t firmly settled in your community, you can often save on the costs by buying less expensive land elsewhere. Looking for tips about what to do with your custom home after you live in it for while? Check out the articles in our Real Estate section.