Is It Cheaper To Build Or Buy A House?

If you’re in the market for a new home, you might have wondered, “Is it cheaper to build or buy a house?” This might seem like a simple question, but it’s actually pretty complicated!

There are many different costs involved in building a house vs. buying one. In this post, we’re looking at the costs associated with each, some pros and cons of each approach, and hopefully, by the end, you’ll know whether you should build or buy a house.

As you can probably guess, building a new house comes with many different costs. According to data from Angi, it costs approximately $313,965 to build a new house in the United States, and people typically spend between $137,054 and $523,404 on average.

Typical construction costs to consider when building a new house include:

• Buying land: $15,000 to $70,000

• Laying foundation: $5,100 to $19,400

• House framing: $18,500 - $27,500

• Roofing: $4,500 to $20,000

• Interior finishing: $50,000 to $175,000

• Exterior finishing: $25,000 to $60,000

Let’s break down a few of these costs a bit further. 

While the costs of buying a new home may seem obvious, things tend to be a bit more complicated than prospective homeowners may realize.

Building a home comes with a wide range of benefits and drawbacks that future homeowners need to consider carefully before choosing to move forward with any construction plans they might have. These include:

• Customization: You can customize your future home to meet your exact desires, so you’ll get exactly what you want out of it.

• No competition: You can avoid the hassle of placing competing offers in the housing market.

• No repairs: The home will be brand new, so you won’t need to worry about any significant repairs when you move in.

• Energy efficiency: Newer homes tend to be more energy efficient.

• Cheaper maintenance: Newly built homes generally cost less to maintain.

No previous owners: You’re the first person to own the house! That means no dealing with previous owners’ decor choices, leftover debris, and more. 

• Long timelines: It takes a lot of time to build a new home, so buying might be a better option if you need somewhere new to live right away.

• Lots of decisions: You’ll have to make many decisions throughout the building process.

• Potential issues: You may have to deal with issues with contractors.

• May not be cost effective: It may be more or less expensive than buying an existing home — it all depends on your situation, location, and home design.

• Large upfront costs: You’ll have to handle every expense, which can get expensive quickly.

• No negotiation: You don’t have many options for price negotiation beyond negotiating your initial quotes from contractors.

• Risking resale value: Home trends can fade quickly, and you may eventually find it challenging to sell the house if you’ve made non-traditional design choices.

Like building your own home, buying a home also comes with a range of benefits and drawbacks that prospective homeowners need to consider before investing their hard-earned savings.

Some of the most prominent pros and cons of buying a home include:

• Faster timelines: Buying an existing house allows you to move in more quickly.

• Chance for negotiation: You’ll have more opportunities to negotiate prices when buying a home versus building one.

• Choice of location: You can buy a home anywhere homes already exist — not just where land is available.

• Spread the cost of renovations: You can make a budget for renovations and do them over time.

• Existing landscaping: Existing homes will usually have pre-existing landscaping, something you’ll have to create from scratch if you build your own home.

• Up-front repair costs: You may need to invest in repairs sooner.

• Required renovations: You may need to renovate or upgrade to get what you want.

• Less energy efficient: Existing homes tend to be less energy efficient, costing more to heat or cool than newly built homes.

• Less personalization: You’ll probably have to make some compromises versus building your ideal home.

• Outdated systems: You may need to update existing systems like plumbing and electrical or replace older appliances.

• More competition: You’ll likely have to deal with some market competition from other buyers.

So, what should you do? Is it cheaper to buy or build a house? The answer, of course, depends.

If we compare our average costs to build a new home — $118,100 on the lower end and $371,900 on the higher end — building works out to be more affordable than the average cost to buy a home, which is $420,800. However, these costs are extremely dependent on different factors like your location.

For example, it could cost you $333,200 just to purchase an acre of land in Massachusetts, while you could buy a whole home in West Virginia for $160,044.

If you’re looking for the cheapest way to build a house, we have a few ideas you can consider.

Ultimately, the choice to build or buy a home will depend on your priorities. Building is the way to go if you want a home designed to your exact specifications and can pay for everything upfront. If you’d rather have your pick of the existing homes on the market and spread out the cost of renovations, you should consider buying a home.

In either case, having a solid plan for any construction project is essential, and My Site Plan can help. We can create detailed site plans, plot plans, floor plans, and more to help you create the home of your dreams. And if you’re looking for inspiration, you can read through the helpful guides on our blog.