We have all fancied building our own homes to fit our needs and lifestyles. The possibilities of design choice are limitless, from an indoor swimming pool to a huge sleeping space. Embarking on this project will require consideration of its financial implications.

While many individuals assume that buying a house in the US is cheaper, the reverse is the case. Want to learn more? Check out how much does it cost to build a house to learn if it is a good fit for you.

Determining The Cost Of Building

In our own experience, the most exciting thing about building your own home is the experience it gives. The final say in any decision is in your hands, from getting the land to installing the last furniture.

However, these decisions impact the cost of building the house, as location and interior and exterior finishes will significantly impact the budget of constructing your dream home.

On average, 35% to 55% of the total budget goes to land and materials, 20% to 60% is labor costs, and 10% to 25% goes to design, administrative, and permit costs. Let’s take you through some of the processes and the cost implications.

Selecting A Region

The overall cost of building a house differs from one region to another. For example, it would cost more to build a house in San Francisco than to build exactly the house in different regions of the country.

Plus, the price difference can also be noticeable in the housing costs depending on the region. It is also important to pay close attention to the residential construction restrictions that vary by state and city.

Construction of the septic system, heating system, and road connecting to the property will be an additional cost you can incur in the rural area of some settlements.

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Choosing A Design 

After you have decided on the region that suits your taste and budget, next is to decide whether to design your dream home or use a developed one. However, it is worth noting that building a dream requires that you have architectural plans in place. 

Hiring an architect to design your custom floor plan for your home can cost you more than $6,000; working with a draftsperson will averagely cost less than $2,000. Also, the house’s complexity and the architect’s qualifications and experience play a significant role in the pricing. 

Getting The Land

The land cost will vary depending on the location and size of the land. Note that urban settlements are more expensive than rural areas in any given region. Whether it is an untouched land or a developed lot can also considerably affect the value of the land.

The good news, however, is that you can often take loans for land purchase separately from construction loans.

Constructing A Foundation

Foundation is the first stage of building construction. The average cost of installing a foundation in the United States is about $10,000. It is also important to note that while a simple slab will cost less, constructing a basement during the foundation will mean additional costs at this stage. This extra cost results from additional excavation, materials, and reinforcements required to get things done.

Framing The Building

Framing helps to get your house into your desired shape. The framing, often done using wood, costs about $25,000 to $55,000. However, this price can be significantly increased depending on the timber price and the design’s complexity.

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Roof Construction 

Typically the roof costs about $15,000 to install. The size and the roofing material of choice might increase the cost. Adding solar panels to your new roof will also increase the cost.

Key Systems And Finishing

Key electrical and plumbing systems can add about $20,000 to $75,000 to your budget. New heating, ventilation, and air conditioning system typically ranges from $5,000 to $10,000, with an average cost of the electrical wiring of $1 to $5 per square foot of your new home, depending on the quality.

Plumbing costs can range from $5,000 to $15,000. The total square footage of your home will be a key factor in determining the overall costs of your key system and finishing. The material of choice determines floor, wall, and ceiling finishing.

Permits And Regulation

The major fear for most people building is the cost of clearing regulations and permits, which is 20% of the final building construction budget, depending on the location.

Regulation costs on developing around the lot and during construction make up most of this. Each addition to the house, such as an outdoor swimming pool, will require its permit with associated fees. 


While buying a home might seem the better option, building your own house could be cheaper. You also have the added advantage of building the house to your desired taste. However, it is advisable to plan meticulously and work with professionals to reduce the cost of building a house.