The Cost Of Building A Home

Published On: January 3rd, 2022Categories: Real Estate EducationLast Updated: January 3rd, 202212 min read

About the Author: Lisa Lete

Homeownership is the perennial American dream. However, at this point in time, homeownership is simply not as easy as it used to be. With an ongoing housing shortage in Texas and throughout the country, those who are fortunate enough to have (or obtain) land are opting to build their personal dream home from scratch while others are building investment properties. Either way, there’s a lot to consider when it comes to home construction and at the top of the list is: COST. According to HomeAdvisor, the average cost of building a house in 2021 is $298,432. A typical price range is between $154,185 and $477,534. With continued rising inflation, these prices are likely even higher. While those numbers may be daunting to some, the American dream is still worth pursuing and building your own home can make it even more rewarding. If you’re thinking about building, here’s a few things to know about home construction:

Things to Consider When Building A Home

Master Budget

By now, you should have some secured financing so you know how much money you’re working with. That means you can have some fun deciding on a home style and what will fit your budget. From here, you can build a master budget to follow. You’ll want to do some research and get some estimates from building professionals. A solid, well-researched budget can help keep you on track throughout the entire building process.

Home Style

If you’re planning on a custom designed home, you’ll want to consult with an architect. According to HomeAdvisor, home architects cost between $10,000 and $60,000. A less expensive option is a “new home community” model. Most builders have around 20 floor plans to choose from and charge much less than an architect. An even more cost effective option is a prefabricated home. These types of homes are manufactured off site and then assembled onsite and can be just as beautiful as a stick built home. Additionally, you’ll want to pin down the location and size of your home as these two factors can, obviously, greatly affect the cost of building.

Custom Design Home or New Home Community

Hire Professionals

If you’ve opted for a custom home, you’ll need to officially hire an architect or a custom home builder to develop blueprints and help bring your vision to life. You’ll also need to hire a general contractor to oversee the subcontractors, deal with the legal aspects of building and effectively complete the job. Make sure that all of the professionals you hire are properly licensed and take the time to check reviews and references.

Hire Professionals to Build Your Home

Paperwork Galore

Building a house requires a whole gamut of permits: building, grading, plumbing, electrical…Just when you think you’re all caught up, you’ll need another permit. This is where a good general contractor becomes invaluable; they can take care of all the paperwork and any required inspections. While your contractor will be required to have insurance, purchasing your own policy to cover the project is a good idea. It shouldn’t be costly and will cover you financially if anything goes wrong.

The Waiting Is The Hardest Part

According to the US Census Bureau, the home building process takes approximately eight months from start to finish. This includes finalizing plans, obtaining permits, the actual construction and the final inspection. It takes the coordination of several teams of professionals to complete the job. The process can be delayed by weather, labor shortages, supply issues and other factors. So, while you’re sure to be excited about moving into your brand new home, patience is “indeed” a virtue.

Mortgage Down Payments: Learn The BasicsMortgage Down Payments: Learn The Basics
FHA Government LoanWhy Do Sellers Avoid Buyers With FHA Loans?