Should you build or buy a home?
With home inventory tight across the nation, many would-be buyers are considering alternatives — like building their own home from scratch rather than buying an existing one.
But that begs the question, is it cheaper to build or buy a house?
Well, if you compare average build prices to average purchase prices, building your own generally comes in just a little less expensive. But there are so many variables that that’s far from certain in every case.
Wondering whether to build or buy in 2022? Here’s what you should know.
Verify your home loan eligibility. Start here (Jan 18th, 2022)
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Is it cheaper to build or buy a house?
At the end of 2021, the U.S. Census Bureau put the national median sales price for an existing home at $416,900. And Realtor.com reckons the average cost of building a home in the second half of that year was about $379,000, including excavations, permits, inspections, and other associated costs.
But that construction cost excludes the price of the plot on which you’ll build. Add that on and you’ll hardly notice the difference between building and buying.
- Average cost to build a house: $379,000 (excluding land plot)
- Average cost to buy a house: $416,900
So, which is the right choice? That depends on a lot of factors — like your needs, location, timeline, local home inventory, and the availability and prices of materials and labor.
Let’s dig into these factors a little further to help you weigh the costs and benefits of building vs. buying.
Check your mortgage options. Start here (Jan 18th, 2022)
Average cost to build a house
As mentioned above, Realtor.com put the average cost to build a house at around $379,000 as of late-2021. And that’s before adding on the cost to buy a plot of land.
With the land purchase included, there’s not much of a gap between the average price of building and buying. And building could end up being substantially more expensive depending on your location and construction plans.
There are many other variables that will impact building costs, too. Let’s dig into what those are.
Building a house: Cost variables
First is the cost of construction. This can vary a lot not only by builder but also depending on the cost of materials where and when you want to build.
If you …….