In some US states, building a house is cheaper than buying one. (2023)

With limited inventory and home prices at record levels, many Americans believe that buying a finished home is impossible or out of their budget. Building a house from scratch is an attractive but expensive alternative, but with construction costs also rising, is it cheaper to build a house? ONEnew StorageCafe study reveals where homebuyers will find it cheaper to build than to buy.

Main conclusions:

  • In California, over $200,000 can be saved on average when you build a house instead of buying it.
  • In states around Washington – Virginia, Maryland and Delaware – nearly $100,000 can be saved.
  • The Rocky Mountain states - Colorado, Utah, Montana and Idaho - rank higher than any other region for home construction versus purchase cost.
  • In Hawaii, buying a house costs almost twice as much as building one.
  • The Midwest states are the most affordable to buy a home in - the cost of building a home is anywhere from $64,000 to $178,000 more.
  • The Western and South Atlantic states are proving to be the best places to build rather than buy.
  • In California, at least $200,000 can be saved on average, while about half of that amount can be realized in states like Colorado, Utah, and those close to Washington DC. Away from the contiguous United States, Hawaii can offer home builders big savings.
  • Meanwhile, in the Midwest, South and Northeast, lower home prices tend to make home buying more attractive, although Florida and Massachusetts favor construction.

In some US states, building a house is cheaper than buying one. (1)

List of Hawaii Homes Cost Over $1 Million, While Building One Costs Half of That

Hawaii has the highest median price for a single-family home of any state at just over $1.045 million - nearly double the total cost of building a home there, which comes in at around $551,000. The appeal of construction in the Aloha State is heightened when you consider the average lot size of 0.62 acres - nearly double the national average - and many lots for sale in Hawaii with beach access and stunning views.

"The median home price in Hawaii is typically higher than in most other states, making buying an existing home significantly more expensive than building a new one from scratch. Even so, building a home in Hawaii can expensive compared to the mainland", confirms Nick Mueller, director of operations “The cost of building a new home in Hawaii can be substantial, with estimates ranging from an average of $185 to over $400 per square foot... fees or other related expenses.

California leads Pacific Rim states in favor of building over buying homes

The cost of building a home in the West can be significant. But because of the comparatively high prices of single-family homes in states along the Pacific Rim, the savings on building a new home is one of the highest in the country.

(Video) 10 Cheapest States to Buy a House in 2022.

"Building a home in California is becoming more and more affordable," says Scott Berens, CEO of California real estate specialist Balsamo Homes. "While buying land, hiring professionals, and paying for raw materials can all come at a high price, they tend to compare favorably with real estate prices in the same area. That said, homebuilding in California does have challenges. unique due to varying climates across the country Currently, places like San Francisco and Los Angeles can be more expensive for home construction projects, however, many other locations in California, like Marin County and San Diego, can offer better economic efficiency for the builders".

California stands out as the continental US state where building a house seems more advantageous than buying one. The cost of building a home in the Golden State is around $495,000, which is a savings of about $205,000 compared to the average single-family home listing price of $700,000. It should be noted, however, that the average lot size here is one of the smallest in the country at 0.17 acres, though that should be plenty for a home with that all-important pool.

Washington state is at 11youposition in the ranking of financial advantages that can be obtained in the construction of a house, those who choose this option instead of buying it can save approximately $66,000. Combined construction costs are about the same as California at $493,000, but that compares to a much lower median home listing price of $559,000. Building land is reasonable, with an average cost of $44,000 per acre.

Oregon has a significantly higher average residential land cost of $113,000 per acre, but savings of $43,000 can be made by building instead of paying the median price of $545,000 for a turnkey home. Building costs can be a little more expensive in Oregon than other West Coast states, but building far from major cities tends to lower the required value.

Rocky Mountain states save about $100,000 when building a house

The mountain, the western states of Colorado, Utah, Montana and Idaho are all in the top 10 for saving money when building a home. Additionally, Wyoming, which also overlooks the Rocky Mountains, is in the top half of the state ranking in this regard. The region's southern desert states, Nevada, Arizona and New Mexico, tend to have lower real estate prices, making home building seem less profitable.

(Video) Top 10 Cheapest States to Buy a House in 2023.

Colorado can offer the greatest overall savings in this area when choosing to build a home, no less than $107,000, with the help of a reasonable average land price of $43,000 per acre, applied to an average lot size of 0.18 acres. This results in a combined construction cost of approximately $492,000, compared to an average price of $600,000. The state has construction opportunities in cities with thriving job markets and in more remote but beautiful locations.

In some US states, building a house is cheaper than buying one. (2)

Up north, Montana and Idaho can save about $84,000 and $70,000, respectively, for anyone willing to go the long way to home ownership. The average cost to buy a home in both states is less than $600,000, so this more northerly region is slightly cheaper for homebuyers across the border. Montana's building numbers include the added benefit of an average lot size of 0.36 acres, compared to Idaho's 0.21 acres.

High home prices in Utah's Summit and Wasatch counties make building much more affordable

Utah has been a fast-growing state in recent years, with a booming technology sector and housing prices to match. The average land price of about $234,000 per acre is actually the highest in the country, bringing the total cost to develop a medium-sized lot — which is 0.21 acres here — to $538,000. However, that still looks good compared to an average price of $635,000, a difference of $97,000.

Among Utah counties with available listings, Summit County offers builders the biggest savings, at least $1.7 million. The large average lot size of 0.38 acres results in a high price of $176,000 and a total construction cost of $677,000. But that's dwarfed by this sought-after area's average home listing price of nearly $2.5 million. Wasatch County has the next best economy for home builders at $843,000 with a home listing price of about $1.5 million and despite an even higher median lot price of $189,000. Rich County offers lower construction earnings of about $185,000 - the average lot purchase price of $82,000 is offset by a home listing price of $760,000 - and Washington County offers a small savings of $15,000.

(Video) Cheapest US States To Buy A House Or Property In 2023

At the other end of the Utah spectrum, Cache County is best for buyers and a total construction cost of $643,000 cannot compete with a listing price of $498,000, a difference of $145,000, while Box Elder County has second best advantage for buyers around $90,000. Salt Lake County, by far the most populous county in Utah, surprisingly has the smallest average lot size in the state at 0.16 acres, but also the highest land prices at $1.3 million per acre and the cost Construction cost of one home ($711,000) exceeds listing price ($636,000). ) at $75,000. Davis, Sanpete, Iron, Utah, Weber, and Kane counties are cheaper to buy than they are to build, with differences ranging from $14,000 to $73,000.

The states around DC cost a fifth of what a new house costs when they build it.

The country's capital attracts workers from all over the country, but they don't always manage to live there. Fortunately, many can commute from the neighboring states of Virginia, Maryland and Delaware - this area is considered the southern part of the country for the purpose of calculating construction costs. In all three of these states, savings of about $95,000 can be made by building rather than buying a house.

Virginia offers a low average price per acre for home lots of $33,000 and the average lot size here is 0.29 acres. The average combined construction cost of about $361,000 compares to an average listing price of about $458,000, and the state has communities across the river from DC and scenic areas farther afield. Maryland offers very similar numbers of $365,000 and $460,000 - although the average lot size is slightly lower at 0.17 - plus Baltimore City and other job markets.

South Atlantic states offer savings for homebuilders with Florida leading the way

Still in the south, Florida tops the list for the amount of savings anyone can make by building a single-family home instead of buying one, with North Carolina and Georgia also putting money in their pockets.

Florida can offer savings of $76,000 when building a home, with the residential land cost being quite expensive at $108,000 per acre and the average size being a solid 0.20 acres. While the savings are comparable to those achieved in the western mountain states, average prices are significantly lower - construction and purchase costs are $375,000 and $451,000 respectively, which means the savings will be extended further to pay more property building jobs.

(Video) Top 10 Cheapest States To Buy A House - Nowhere Diary

Within the Sunshine State, there is wide variation in costs between counties and regions. For example, Monroe County, which includes the exclusive communities of the Florida Keys, has the most expensive homes in the state, with an average price of just over $1.5 million. And while land is surprisingly expensive here too - $1.3 million per acre, with the average lot size a solid 0.14 acres - building a house would represent a huge savings of around $1 million compared to buy one.

In some US states, building a house is cheaper than buying one. (3)

Other places where construction offers a great economic advantage include the coastal counties of Walton and Gulf - the benefit in the former would be no less than $657,000 because of an average listing price of $1.1 million. Likewise, the Gulf Coast retirement havens of Collier and Sarasota counties also favor construction, with low land costs of $81,000, $108,000 per acre, with the former costing about $576,000 less to build a house than an average listing price of $1 million. Other counties that are rewarding builders are the desirable addresses of Palm Beach and Martin, north of Miami, and Orange, which includes the job magnet city of Orlando.

Anyone looking for a home in or around Magic City should know that Florida's highest home prices of $2.5 million and $1.7 million per acre in Broward and Miami-Dade counties, respectively, make the purchase much more economical than building on a medium-sized lot. there. Interestingly, inland counties are often the most favored to buy a turnkey home, with Washington and Jackson in the Panhandle going for $145,000 and $128 cheaper, and Putnam and Bradford near Jacksonville leaving buyers averaging around $ 100,000 in your pockets - total In these cases, while the total cost of construction is not excessive by less than $400,000, average listing prices are less than $300,000.

To read the full report, including more data, charts and methodology,Click here.

(Video) 3 Cheapest States to Buy a House & What $1,000,000 Buys There


Is building a house cheaper than buying in USA? ›

Overall, it's cheaper to build a home than to buy one in California, with 13 out of the 20 counties saving you money if you decide to build your house from scratch. Budget-wise, building is more favorable in Southern California whereas Central California caters best to those interested in buying.

Is it cheaper to build a house rather than buy one? ›

As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.

Is it still cheaper to build than buy? ›

The Golden State is the second-most cost-effective state for home building in the United States, trailing only Hawaii. Yardi's data estimates that it could be more than $200,000 cheaper to build a home from the ground up, rather than purchase one that's already standing.

What state has the cheapest new construction homes? ›

Cheapest Places To Build A House
  • Spring Hill, Tennessee.
  • Mount Juliet, Tennessee.
  • Bentonville, Arkansas.
  • Herriman, Utah.
  • South Jordan, Utah.
  • Harrison, New Jersey.
  • Boerne, Texas.
  • New Braunfels, Texas.

Is it financially better to buy or build a house? ›

Pros Of Buying An Existing Home

Less costly: In general, you'll likely find it cheaper overall to buy an existing home, but that also depends on the market. A home loan is less risky than a land loan, and typically comes with a lower down payment and better interest rate.

What is the average price of building a house in USA? ›

While the average cost to build a house was $285,956 in 2022, most homeowners spend $111,892 – $460,414 to build their homes. Even though you can get a general idea of what you may pay, it's important to keep in mind that there are numerous factors that will impact the cost to build.

What is the most expensive part of building a house? ›

Framing. Perhaps the most expensive part when it comes to building a home is the framing, which consists of wooden beams that make up the home's skeleton. Forbes states that high-quality lumber averages about $33,000 for a home in the United States. Metal stud framing systems begin around $20,000.

What are the disadvantages of building a house? ›

Cons of Building a House
  • Longer timeline: While an existing home is often move-in ready, a new build can take several months to complete. ...
  • Limited flexibility in price negotiation: While you can save money if you build your own home, you will not have as much negotiation in the price.
Feb 3, 2020

Is it cheaper to build a house in Florida? ›

While Florida is not one of the most expensive states in which to build, it does rank in the top third, but benefits from the state's low labor costs. At an average cost of $125.41 per square foot, building a home can be affordable in many areas of the state.

What is the cheapest type of house to build? ›

The cheapest way to build a home is to design a simple box. Sticking to a square or rectangular floor plan makes the building and design simple. Generally speaking, building up is cheaper than building a sprawling one-story home, so you may want to consider planning for a multiple-story home if you need more space.

How can I save money to build a house? ›

Value Engineering
  1. Reducing Square Footage. One way to dramatically reduce costs is to just reduce the square footage of the entire home. ...
  2. Choosing a Stock Design. ...
  3. Reducing Lineal Feet of Logs. ...
  4. Opt for a Simple Roof System. ...
  5. Use Drywall on Interior. ...
  6. More Modest Kitchen. ...
  7. Don't Take a Bath on Your Bath. ...
  8. Avoid Change Orders.

Is it cheaper to build a house in Texas? ›

Housing in Texas can be much cheaper than housing in both the west and east coast. Even constructing your own home in the city can be quite affordable when compared to places like California. However, even in Texas, the price of a pre-existing house will be much less than the price of constructing a home.

What state is best to build a house? ›

The 10 best states for building based on the difference in cost compared to buying are:
  • Hawaii (where building costs $494,000 less than buying)
  • California ($205,000)
  • Colorado ($108,000)
  • Utah ($97,000)
  • Virginia ($96,000)
  • Delaware ($96,000)
  • Maryland ($95,000)
  • Montana ($84,000)
Feb 23, 2023

What state has cheapest building materials? ›

Oklahoma. Cheap labor and building costs help Oklahoma land in the No. 1 spot for the cheapest places to build a home. The average cost to build an 1,800-square-foot home here is the lowest in the U.S.

What states are homeowners most expensive? ›

10 Most Expensive States for Homeowners Insurance
#StateAverage Rate (for $300-399k insurance)
6 more rows
Mar 2, 2023

How long does it take to build a home? ›

On average, it takes seven months to build a house from start to finish, according to a 2019 U.S. Census Bureau report. But you may also need to include time for an architect to draw up plans (1–4 months). Then tack on another month to get your project authorized before shovels can hit the dirt.

Is a house worth more after its built? ›

Although you may pay for their charm and individuality, these old homes still cost significantly less upfront than their newer counterparts. The price of a newly built home is often higher than that of an older home by a staggering 30% or more.

Is it financially smart to buy a house? ›

For many people, owning a home leads to greater financial stability. In fact, according to a 2020 survey by the Federal Reserve Board, homeowners have a net worth of $255,000, more than 40 times the $6,300 net worth of renters. This can be attributed to the fact that homeowners build equity when paying a mortgage.

What is the cheapest house to build in us? ›

Ranch Homes

A home with a simple and concise layout is the cheapest type of house to build. Ranch homes are typically single-story structures with attached garages. They're easy to find construction plans for and highly customizable, so you can find a home that fits your needs and budget.

How long does it take to build an average house in the US? ›

Construction Style

The style of your home will also influence construction time. Custom-built homes average around nine months, while personalized production plans average near seven months. Because the floor plans used by production builders have been built many times before, there are generally fewer delays.

Why does it cost so much to build a house in America? ›

Key Takeaways. Building a house adds costs for land purchase, the permitting process, and multiple inspections. The farther your plan strays from a standard model, the more costly it will be. Buildable lots in urban areas can be prohibitively expensive.

Are 1.5 story houses cheaper to build? ›

People typically expect a 2-story home to be more expensive than a 1-story, but that's not always the case. A 1.5-story home is actually the most expensive. Learn why in this helpful checklist. We get asked lots of questions about the cost for building your perfect home, no matter the size!

Is two story cheaper to build? ›

Two-story homes are more cost-efficient to build because they offer more space without adding more foundation or roof costs, so the cost per square foot is often less expensive.

Which room in a house is most expensive? ›

1. Kitchen ($10,000 to $30,000) One of the most important rooms in the house, it makes sense that kitchens are also one of the most expensive to build or remodel. From plumbing and electrical, to the layout, to the materials in the room, it adds up.

What to be careful about when building a house? ›

Before taking on such a large project, there are several things you should know before building a house.
  • Consider the time and money you'll spend. ...
  • Research contractors. ...
  • Make a larger investment in foundation and framing. ...
  • Pay close attention to the wiring. ...
  • Plan for storage spaces. ...
  • Choose your fixtures wisely.
Dec 22, 2022

Why are new homes built so close together? ›

Economists point to decades-old zoning rules and land-use regulations as the reason there is a shortage. “Space is tight, and so new homes are being constructed right next to each other,” says Doug Greene, a real estate investor in Philadelphia.

Why are Florida houses so cheap? ›

Insurance and Property Taxes

Due to these questionable weather conditions, insurance and property taxes for Florida houses tend to be higher than in other states, especially in the cities and towns near the coast of Florida. Property prices are therefore lower to sort of offset the insurance and property taxes.

How much does a 4 bedroom house cost to build in Florida? ›

The average price to build a house in Florida with four bedrooms is between $388,000 and $465,000. This range is higher than the average Florida construction costs due the fact that four-bedroom houses are typically newer than those with three or fewer bedrooms.

How much does it cost to build a $1000 sq ft house in Florida? ›

Average Cost to Build a House in Florida by Square Footage
Home SizeAverage Price Range
1,000 sq. ft.$147,000
1,500 sq. ft.$220,000
2,000 sq. ft.$294,000
2,500 sq. ft.$367,000
1 more row
Mar 29, 2023

Where is property the cheapest in us? ›

Key Findings. Tennessee is the cheapest state to buy a house in 2022. Oregon is the most expensive state to buy a house in 2022.

What is the most efficient shape for a house? ›

When it comes to the most efficient building shape, uncomplicated dome and cube structures retain the most heat. This is because the air can circulate more efficiently around a dome whilst a cube has the smallest surface area to floor area ratio, so it loses minimal amounts of heat.

What is the cheapest structure to live in? ›

Dome homes are arguably the cheapest site-built home available. These homes are constructed of a steel frame, covered in a fabric form, and then sprayed first with foam and concrete. The result is a solid structure capable of withstanding all types of natural disasters, including tornadoes, hurricanes, and earthquakes.

How much cash should you have to build a house? ›

Cost to Build a House by Size
Square FeetCost to Build
1 more row
Feb 2, 2023

What should you not skimp on when building a house? ›

Where Not to Cut Costs When Building a New Home
  • Windows. You don't have to break the bank on the windows for your home, but you definitely don't want to cheap out on them either. ...
  • HVAC System. Your HVAC system is another great place to throw money at when building your new home. ...
  • Appliances. ...
  • Roof. ...
  • Insulation.
Aug 21, 2019

How much should I save before building a house? ›

The bank usually wants you to make a down payment of 20% of either: the cost to build. or. the appraised value.

Why building in Texas is so cheap? ›

More Relaxed Codes & Regulations

A few states across the country have relaxed building codes, and Texas is one of them. Endless permits and red tape do not hold up developers and construction crews. Consequently, homes are built faster, increasing the supply and keeping overall home prices more affordable.

How much does it cost to build a 2000 square foot home in Texas? ›

Home Construction Costs in Texas

If you are building a home in Texas, prepare to pay between $150 and $350 per square foot. Based on our survey of local builders, the average cost to build a house in Texas is $225 per square foot.

How much does it cost to build a 1700 sq ft house in Texas? ›

According to Homelight, the average building cost for a newly constructed 1,600-1,700 square-foot tract or spec house in Texas was $325,000 in late 2022. Here are some of the common costs they cite as crucial to your pricepoint: Buying a plot of land ($6,471 per acre) Foundation ($4,000 – $13,500)

What state is booming with construction? ›

Coming in at the top of the list, Utah has the most new construction homes being developed with 11.7 new builds per 1,000 residents (which is more than double the U.S. average of 5.23 new builds per 1,000 residents) followed closely by Idaho with 11.43.

What is the best state to own land in? ›

Top 10 States to Buy Land in the USA in 2023
  • Oregon.
  • Arizona.
  • Florida.
  • Utah.
  • Texas.
  • Nevada.
  • Idaho.
  • Arkansas.
Apr 6, 2023

What kind of credit score is needed to build a house? ›

Assuming that you're making the standard down payment of 3.5 percent, the minimum construction loan credit score is 580. Otherwise, you can apply for an FHA new construction loan with a credit score as low as 500, but in that case, you'll need to make a 10 percent down payment.

What state is everything cheaper? ›

1. Mississippi. Coming in as the cheapest state to live in in the United States is Mississippi with a cost of living index score of 83.3.

Where is the best place to build a house? ›

The Indian science of architecture, Vaastu Shastra recommends rectangular or square shaped plots as ideal ones to build houses. Also, a land with road facing East, North, West or South is considered best. Vaastu advises to avoid plots where a road or passage ends, as it makes an uncomfortable living space.

What is the cheapest country to build a house? ›

By these rankings, Turkey is the most affordable country for home shoppers, with an average cost of $69 per square foot. No. 2 for affordability is Mexico, where the average dwelling comes in at $90.10 a square foot (by the rough math, that could get you a 1,000-square-foot dwelling for around $90,000).

What is the most expensive state to live in right now? ›

1. Hawaii. Hawaii is truly a paradise, but it is also the most expensive state in America to live in. The cost of living in Hawaii overall is 86% higher than the national average, and the cost of housing in Hawaii is a jaw-dropping 207% above the national average.

Which are the 10 most expensive states to live in? ›

Here are the 10 states with the highest cost index:
  • Hawaii - 193.3.
  • New York - 148.2.
  • California - 142.2.
  • Massachusetts - 135.
  • Oregon - 130.1.
  • Alaska - 127.1.
  • Maryland - 124.
  • Connecticut - 121.6.

What city has the most overpriced homes? ›

The most overvalued markets to purchase a home tend to be in California, but also include Seattle, Washington, and “Zoom towns” such as Boise, Idaho, and Greeley, Colorado.

What is the cheapest way to build a house in USA? ›

The cheapest way to build a home is to design a simple box. Sticking to a square or rectangular floor plan makes the building and design simple. Generally speaking, building up is cheaper than building a sprawling one-story home, so you may want to consider planning for a multiple-story home if you need more space.

What is the lowest cost to build a house in the US? ›

Oklahoma. Cheap labor and building costs help Oklahoma land in the No. 1 spot for the cheapest places to build a home. The average cost to build an 1,800-square-foot home here is the lowest in the U.S.

How do you save money on a new build? ›

Value Engineering
  1. Reducing Square Footage. One way to dramatically reduce costs is to just reduce the square footage of the entire home. ...
  2. Choosing a Stock Design. ...
  3. Reducing Lineal Feet of Logs. ...
  4. Opt for a Simple Roof System. ...
  5. Use Drywall on Interior. ...
  6. More Modest Kitchen. ...
  7. Don't Take a Bath on Your Bath. ...
  8. Avoid Change Orders.

What is the cheapest style of house to build per square foot? ›

1. Prefabricated Homes. Prefab homes are some of the cheapest type of houses to build per square foot. Prefab homes also come in a variety of sizes.

Which city of USA has cheap houses? ›

1. Detroit, Michigan. The Motor City tops the list of most affordable places to buy a home. Despite the median salary being among the lowest of the affordable cities on this list, so are home prices.

Where is the cheapest place to live in USA to buy a house? ›

Key Findings. Tennessee is the cheapest state to buy a house in 2022. Oregon is the most expensive state to buy a house in 2022.

Who builds the most affordable housing? ›

The Top 10 Affordable Housing Developers in The U.S.
  • The Pacific Companies. ...
  • LDG Development. ...
  • Dominum. ...
  • Rise Residential Construction. ...
  • The NRP Group. ...
  • McCormack Baron Salazar. ...
  • Commonwealth Development Corporation of America. ...
  • The Michaels Organization.
Feb 19, 2023

What time of year is cheapest to build a house? ›

Starting house construction in the fall and winter months is usually cheaper and more convenient, which might come off as surprising! Read on to find out more about the right time to build, pros and cons of building throughout the year, and advice on how to decide the right time to build for you.

What is the cheapest most efficient home to build? ›

Ranch-style homes are not only popular but also one of the most cost-efficient home styles to build. These homes typically come in a rectangular shape, though many resemble “T” or “S” shapes. The ranch style's simple layout reduces complications in construction.

Where is the best place to build a house in the US? ›

Rocky Mountain states — Colorado, Utah, Montana and Idaho — occupy more top spots than any other region does for home building vs. buying costs. In Hawaii, purchasing a house costs almost twice as much as building one.

What cost the most when building a house? ›

Framing is the highest material cost for most new home builds. High-quantity lumber framing averages $33,000 for a home in the U.S. This includes floors, walls and roof trusses. Metal stud framing systems start at about $20,000.

Which part of a building is most expensive? ›

The Framing

A home's framing is its skeleton. Because so much material and skilled labor is required, this is an incredibly expensive part of building a home. While framing may not be as expensive as the foundation or lot, it is typically more costly than other items.


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