Factors That Influence the Cost of Building a Custom Home

Alan Erickson
3 min readNov 9, 2022

Building a custom home is a big decision and can be a significant investment. According to HomeAdvisor, in 2022, the average cost to construct a home across the country is $283,900.

If you’re thinking about building a custom home, you probably have one burning question: how much does it really cost to build a custom house? There’s no easy answer to that question because several factors influence how high or low the estimated total cost will be.

One such factor is the property’s size and location. If you’re building in an urban area, land costs will be higher than in a rural area. And if you’re looking at properties in well-established neighborhoods, those will also come with a higher price tag than vacant land in a less developed area.

You’ll need to hire an architect to design your home’s layout and obtain any required building permits. The cost of home designs averages roughly $5,000 but can go up or down based on the complexity of the house, the number of required inspections and permissions, and other factors.

The fees for building permits can range from a few hundred to several thousand dollars, and if you don’t get the proper permits, the city could make you tear down your new home. Regulations can also substantially add to the cost of building, especially if your city has strict energy efficiency or historical preservation codes.

The cost of building materials is another factor to consider when budgeting for your custom home. Everything from bricks and mortar to lumber and tiles will affect your budget. And if you’re looking for sustainable or eco-friendly materials, those can sometimes come with a higher price tag. Of course, there are ways to save money on construction materials, so be sure to do your research before making any final decisions.

In addition, you’ll also need to factor in labor costs. This depends on who is doing the work, either yourself or a contractor, and how long the project is expected to take.

Building a custom home is a complicated process, but working with a reputable builder will help ensure that everything goes smoothly and that your final product is everything you dreamed it would be. Generally speaking, it will be more expensive to hire professional help than to do it yourself, but that doesn’t necessarily mean it’s always worth going that route. Sometimes, doing it yourself can lead to higher overall costs if things don’t go as planned or if the project takes longer than expected.

Another thing to consider is how much it will cost to lay the foundation. Not every home has the same foundation. Depending on your style, the contractor will pour concrete on the slab, crawl space, or basement. Most of the time, the basement will be the most expensive option, and the slab will be the least. For the most part, the price of a crawl space is somewhere in the middle of the two.

Finally, the features and amenities you choose to include. If you want luxurious items like a swimming pool or a state-of-the-art kitchen, expect to pay more for them. On the other hand, if you’re willing to forego some of those bells and whistles, you can save yourself some money.



Alan Erickson

A custom home builder in Austin, Texas, Alan Erickson has more than 30 years of experience in the construction sector.