Cost of Building your Own home
If you’re thinking of building your own home, you’re probably wondering how much does it cost to build a house.
You’re probably also asking yourself “how long does it take to build a house?”
“What kind of loan do I need when I build a house?”
There are many variables that can affect the answers to these questions.
The following overview includes many insights we think you’ll find helpful.
Read on for an in-depth discussion of what it costs to build a new home in 2017.
Pros of building your own house
- You’re able to customize every detail from the paint color to certain layouts you prefer.
- You can pick out the exact lot you want to be in and which way your house will face.
- Add upgrades, like a half bath or media room.
- It really is a chance to build your dream home.
- Everything is brand spankin new – The walls are free from dirt and paint chips, sinks and toilets are brand new.
- Save money – With all new appliances, sinks, toilets, water heater etc. you will save money because they will not need repairs for several years.
Cons of building your own home
- It can take as long as a year for your house to be completed.
- There is a lot of time involved (picking out each detail)
- Some feel more stressed when building a house
- It is usually more expensive to build a house than to buy a house.
What is the average cost to build a house?
According to the National Association of Home Builders the cost to build a house is usually more than buying an existing home.
This is not always the case, but the majority of the time it is more expensive to build than buy. The cost to build a home will depend on many factors.
- The size of the home – How many square feet is the house you’re building
- The design of the house – A home with a simple design will cost less. For houses with lots of corners, rounded walls, curved staircases, etc. will add to the cost.
- Materials used – If real wood, granite, crown molding, fancy sinks, etc. is used it will also increase the building cost.
- Upgrades – You will have to pay a premium to add your choice of paint, tile, carpet, even extra bedrooms or bathrooms can be added for a price.
How Long Does It Take to Build a House?
When you build your own house it’s typical to take up to one year to complete. There are quite a few steps to take, and each step in the process can be time consuming on its own.
When you add the time needed for each step, you’ll conclude that the process is not a quick one.
Before you can move into your hew home, you must buy a lot to build on, decide on a design for the home, create blueprints, work with builders, get a loan, get the work on the house completed and decorate the home.
Building a house in a Planned Community
Planned communities are where most people choose to build a home. There are a few different home builder’s in a community each one usually has their own model home as the office. This is where you can look at the model home and look at different home designs they offer.
Each design is set in stone for the most part. However, you can add a bedroom, bathroom, media room or powder room in some cases. You will be able to choose the lot you want and the home design. You will also go to the home builder’s showroom to pick out all the upgrades you want.
Having a house design already set makes it much easier and cheaper than buying a completely custom home.
Do I need to get a home construction loan if I build a house?
Not necessarily, a construction loan works similar to a line of credit. Once approved you will have the money in an escrow account to use as needed when you build.
A home construction loan is only required if you hire a custom home builder to build a house in your own lot.
If you use a home builder, you can get an FHA loan, VA loan or conventional loan to purchase the house. The home builder will require a pre-approval letter and a 1-2% deposit to get started on construction. This deposit is non-refundable but goes towards your down payment on a loan.
You will need to get your loan lined up before the home is completed. Once your house is ready you will continue with a mortgage just like you would on any other home.
Average price per square foot
They report an average sum of $289, 415 US dollars, and their reported construction cost per square foot for the same year was $103. The NAHB also reports an inflation rate of slightly more than 4 percent for 2013-2015.
Data from the US Census Bureau reveals that the median size for a single-family home in the USA was 2, 467 square feet as of 2015.
If you add about 4 percent per year to cover inflation, you the price per square foot would be about $111-$127 in 2017.
That means an average cost for a 2, 467 sq ft home could be expected to be in the neighborhood of $313, 309 US dollars in 2017.
Homeadvisor.com reports a slightly lower average cost of $305, 372, but their math was done using a smaller 2, 000 square foot house. They report an estimated average price per square foot of $150 US dollars for 2017.
They suggest that most homeowners should expect to budget between $178, 010 and $466, 493 US dollars when building a brand new home.
Buy vs. Build: Which is Better?
Whether it is better to build a house or buy a house depends on each persons needs. When you buy an existing home you can move into it right away, usually within 30-45 days. However, the design and materials used in the home are usually not what you would pick.
You may have to change the wall colors, sinks, tile and carpet to make it feel more like yours. An existing home is also older, there may be cracks in the paint and walls, worn out sinks or toilets, or even popcorn ceilings. Many times buying an existing house just won’t feel like a new house.
When you build a house you get to pick out all the colors, type of carpet and tiles, cabinet design and more. Also, everything looks and feels brand new. A new house should be in perfect condition when you move in.
You won’t have to worry about the appliances, toilets, or water heater going out, at least not anytime soon. However, you will be waiting for 5-12 months for your new house to be completed.