How Much Does It Cost to Build a Custom Home in 2024 - Essential Information

The cost of building a custom home is among the first things to consider before envisioning your dream home. From sketching the exact layout of your first floor, to selecting the perfect marble floor for your primary suite powder room, building a custom home comes with many luxuries. It also results in a lifetime of practicality, and unmatched comfort & convenience. Personalized homes give you the opportunity to build a home that suits your personal taste and lifestyle requirements. It is about building a house that fulfills your daily needs.

But before you start the custom home journey, here’s a guide to figuring out the financial costs. We are listing a few factors to help you find your first estimate. You can then arrive at a more precise grand total once you meet with your architect and contractor.

Factors Affecting Custom Home Costs:

• ‍Location: The first thing that demands financial investment is the land on which you want to build the house. Logically speaking, you will find cheaper land areas around rural parts while the suburbs and cities will be pricier. The average price for an acre of land in the contiguous United States is around $12,000. However, keep in mind that an acre of land can fit 18 homes that are 2,400 square feet. Estimate the land area required depending on the size of the house you plan to build and how much outdoor area you desire.
• ‍Size of the house & complexity of the design: Naturally, a big building structure will cost more than a small house with all amenities. Also, the complexity of design and custom features incorporated within the structure will cost extra, be it a grand staircase or a spa bathroom.
• ‍What are you going to put inside the house structure?: Apart from the overall building structure, you should consider the costs of all the appliances, furniture, and interior design costs. These are the things that will add to the comfort and convenience within the house. Calculate those costs as well. A dedicated interior designer may cost you anywhere between $100 an hour to $1,000 per room.
• ‍What are you going to put outside the house?: The cost will also vary as per your idea about the outdoor space of the house. Whether you want a garden, driveway, garage, or beautiful landscape, you will have to add them to the budget plan.
• Labor costs: The cost of labor will vary according to the builder or contractor. The best way to get cheaper labor cost is to compare the top five contractors in your area and negotiate with them for the best price possible.
• ‍Permits and fees: The cost to build a custom home also includes the permits and fees paid to the municipality and government authorities associated with the land area. Clear all the permissions and legal aspects to ensure there are no hiccups during the building process.

Who is going to build it?: The building contractor who will manage your entire house construction project along with all the raw material, will take a big chunk of the money. It could be anywhere around $150,000 or 15% to 25% of the total cost of construction. He will also coordinate with the plumber, electrician and other departments related to creating a functional house.

What is typically included in the base house cost?

While keeping the land cost aside, you also need to consider the costs associated with the base or standard house cost. These are pre-construction costs dealing with permissions and utilities that would be added to the upcoming home structure. We are listing them down to help you prepare the overall budget.

• Foundation: It is the cost of laying the foundation of the house structure and may increase if you want a basement area. The average cost is around $8,900.
• Roofing: It is the cost of creating a roof over the building and ranges between $1.50 to $5.50 per square foot. It may vary with the material used for the roof.
• Flooring: From installing a synthetic material or laminate floor which may cost $1 per square foot to covering the floor with natural wood at a cost of $10 per square foot, the flooring is a big expense.
• Lighting: Installing lighting fixtures that suit your taste and sense of space. Roughly, the lighting cost may end up anywhere between $2,000 and $12,000.
• Framing: The house frame made of solid lumber or cinder blocks may cost you $20,000 to $50,000 i.e. $7 and $16 per square foot.  
• Exterior Cladding (Siding, Stone, Brick): Covering the exterior wall of the building with luxury materials like stones or bricks to form an additional layer for an aesthetic appeal or even protecting the wall from harsh weather, may cost you some extra bucks.
• All fixtures & hardware: Materials used to furnish the house frame and cover the interior of the building structure, is an additional cost.
• Electrical, HVAC, Plumbing: Hiring an electrician and plumber will cost you an earth, but are important for the smooth functioning of the house. You won’t be able to save yourself from all weathers without HVAC (heating, ventilation and Air Conditioning) systems installed in the house. So, you need to pay for all of these.
• Drywall & Paint: The purpose of drywall is to create walls, ceilings, design elements like arches & eaves. This would add a designer appeal to your house. Moreover, painting each inch of the house with a long lasting color, will be an extra cost to calculate. If you paint the house yourself, then DIY cost would be around $300 and a professional paint service may cost $28,000 approximately, for big sized homes.
• Mirrors & Glass: Installing mirrors and glasses in each room will have an additional cost, but that is a daily requirement so, worth the investment.
• Insulation: The cost of installation could range between $3,000 and $10,000. Insulation is important to maintain a certain temperature in the house. It also helps to maintain energy efficiency within the house.
• Cabinetry & Counters: Installing cabinets and counters in kitchen and bathrooms would cost $100 to $1,230 per linear foot of the space.
• Appliances: You will need appliances like refrigerator, dish washer, washing machines, microwave, oven, etc to create a functional house. The cost of these appliances will add to the overall cost.
• Windows & Exterior Doors: Installing doors and windows inside the rooms and on the exterior walls, will be a big expense. It will add hundreds of dollars more to your budget.
• Trim & Interior Doors: Trim forms a barrier against harmful pests and adds structural beauty to the building structure. Similarly, interior doors with arch or unique designs will add to the glory of the house and create partitions in the house. You need to pay the cost of all these creative elements.
• Water, sewage and other inspections: Your purchased land needs to be connected to sewers, water lines, electrical grid, cable lines and other utility points. For this you need to get it inspected from a professional and this may cost you around $8,400.
• House Plans or Architectural Fees: Once the land is fixed, you need to hire an architect who will build a house plan or blueprint for the structure of your house. Normally, it is 10% of the overall cost of the house and ends up anywhere between $2,000 and $20,000. You can even buy a plan online, but that may take away from the exclusivity of your custom house.
• Construction Management Fees: You need someone who can supervise the construction site and manage professional laborers on the site. This may eat up 15% to 35% of the total cost i.e. anywhere around $3000 to $52,000.
• Building Permits & Local Fees: You need a building permit from the local government authorities. This cost can range between $1,200 and $2,000. It may also vary as per the legal regulations in the area.

Home Building Cost Breakdown:

The below table covers breakdown of the total cost to build a custom home and gives precise details.

This is a rough estimate and varies according to the size and location of the lot. You may need to add a few other costs specific to your home design so, plan astutely.

Is a custom-built home right for you?

If you are a first-time home buyer be prepared to be extremely detailed about your price point and what you can build within that price point. In addition, you will need patience to complete the entire process of building a home from scratch, versus a pre-built or turnkey home. (While a custom home can take anywhere between two to three years to build, BuildLabs technology allows us to build a solid home as large as 8,000 square-ft in eleven months. Learn how.) Also, prepare to be creatively involved in everything from the shape of the doors to the size of the kitchen countertop, down to every tile.

All these things will take up your time and energy. No doubt the process is challenging but rewarding. On the other hand, there are many builders that offer readymade homes with the flexibility of incorporating the changes that you want. The cost of these homes is cheaper than that of the custom-built house. So, get a 360-degree view of the situation, and decide!

Tips for Budgeting and Controlling Costs:

Building a personalized home can be a taxing process starting from land hunting to managing all finances. It is a big investment that demands proper planning. You need to be careful about overspending and cut down those extra costs. A bulk of these concerns can be eased by hiring the right builders who take accountability, value transparency, and have a proven track record. Reviews and referrals can go a long way to helping you find the right one. Here are a few handy tips to limit your expenses.

• ‍Be practical with the budget: You need to plan a realistic budget that envelopes all the home requirements, creative and otherwise. At the same time, limiting the budget to a certain amount will help you cut down on unnecessary expenses. You must be ready for ad hoc costs that may crop up during the process of building a custom home.
• ‍Choose the right builder: Find a suitable builder with experience in building custom homes in the architectural style you want. You may need to compare and contrast between the best recommendations. Compare their prices, portfolio of work, and negotiate a good deal with the builder of your choice. Discuss with the builder about the mode and method of payment to avoid any issues in the future. Have contracts in writing. Maintain transparency throughout the process for a smooth experience.
• ‍Prioritize your spending: Make sure that you do not waste money on areas that are least important. Instead, invest in high quality material for home spaces that are important and allot a slimmer budget to areas where you can manage with other affordable options.
• ‍Supervise your expenses: It is important to supervise the expenses during the entire custom home building process. A good home builder will update you about the costs associated with each step, but you should also be vigilant and ask them relevant questions regarding the spending of your hard-earned money. Keep a habit of reviewing the budget at each step of the process.
• ‍Be flexible about ad hoc costs: You need to be open minded about the unexpected costs like change in the design, material costs, and other aspects to keep the budget in hand.

These tips should help you to manage building a tailor-made home without stretching your budget.

Building a custom home demands complete attention to the entire process. It demands prudent planning, timely actions and flexibility for unwelcome challenges. A good trustworthy builder with strong references makes all the difference. Still, you need to monitor every aspect with diligence. Although it's a time-consuming process, it results in a forever home, and an investment in your future.

If you are interested in custom building a dream home, BuildLabs is here to help set up your initial build consultation with a clear commitment to your budget and goals. Reach out today.