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Average Custom Home Building Costs


The average custom home building costs for custom homes built in the United States is right around $83 per square foot. The median price however was $78 per square foot. Avergages don’t tell the whole story though, because homes built in the south usually cost less than homes built in the north east, and on the west coast – but this is not always the case. All construction costs have dropped a bit since 2006, due mostly to lower labor costs. These figures reflect the change. In the majority of states the average cost is below $85 per square foot. In the northeastern states and California the average price of construction can be between $100 and $120 dollars per square foot. In reality there are many factors that impact the average custom home costs. Let’s walk through a few.

Average Custom Home Building Costs Factors

Average Custom Home Building Costs Factors: Geography
So how do I estimate how much it would cost in my state? The price of construction varies with the overall prosperity of the area, average wages for workers, average quality of construction, and the kind of extras commonly associated with construction in your area. There’s no need to envy those folks who pay less to build a home because the cost of living is lower there too, and so are their wages. Generally construction costs are highest for Hawaii, Alaska, California, New York, New Hampshire, Connecticut and Massachusetts and larger metropolitan areas such as Chicago.

Average Custom Home Building Costs Factors: Lots, Special Features and Luxury Items
Square foot prices do not include the cost of the lot or improvements to the lot such as grading, or any sort of driveways or swimming pools or etc. Most of these prices do not reflect special plumbing features or custom woodwork either. If you want anything extravagantly luxurious in the way of extras, it’s best to add the cost of those things to the price per square foot. Square footage prices do not include garages, or other unheated areas of the home in the number of square foot. The prices per square foot do include an average porch space, which amounts to 10% of the total square footage. That’s just what size the average little front porch is. If you plan more porch than that you should add the increase of the area at the proper rate for a porch.

Average Custom Home Building Costs Factors: Porches, Garages and Unfinished Non Heated Area
The cost for porches, garages and other unheated areas, which exceed 10% of the square footage of the home, are figured at a considerably lower price per square foot. Garages and other non heated areas finished similarly to garages cost about $25 to $55 per square feet, again depending on the area, and the quality. Porches cost a median of $67 per square foot, but vary from $20 to $85. These high end prices include all sorts of special lighting, and other perks. The materials for decking are about $5 per square foot, and average installation plus materials is about $20. This number is a lot lower and a bit more consistent, but that’s probably because the skills required to build a deck are not specialized nor do decks have to be inspected in most areas. A lot of people just build their own decks with the help of a carpenter friend. This makes the average cost much less.

Average Custom Home Building Costs Factors: Interest
The largest amount you will pay for any of this is in interest on the mortgage, but it’s never included when estimating the cost of your home. By the time you finish paying your 30 year mortgage your price will be nearly double the cost of your home, even at today’s low rates. If you wish to save on your interest costs, a 15 year mortgage makes sense, and will cut your interest costs by more than half. When you are figuring out your cost per square foot, it might be a good idea to remember that the real cost will be doubled due to interest if you get a 30 year mortgage. For this reason it might make sense to build a smaller home, get a 15 year loan, pay it off quickly by making extra payments, and then build an addition onto the house with your interest savings.

Average Custom Home Building Costs Conclusion

While it is impossible to determine exactly how much your home will cost, your home builder or contractor will be able to give you a fairly accurate estimate, and the bank will lend you about 10 percent in overage money if it is needed. If it is not used you will not pay interest on it and it will be returned to the bank after construction.

In applying average costs, keep in mind your area, and the quality of home you are building. Ask yourself how it might compare to a very basic cottage in Mississippi ($60 per square foot,) or a Mansion in Hollywood California (Costs for those houses are often $300- $390 per square foot). Where on that scale does your house fit? Average custom home building costs are difficult to apply to each situation, but if you keep in mind how much below or how much over your house, and location is from average you’ll be able to get a ballpark figure.

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