Building a custom home can be an incredibly rewarding experience. Whether you choose a preexisting home plan, hire an architect, or even design a home yourself, you get to hand-pick all the features you want from a new home and make something that’s truly your own.

Finding the right budget and making an estimate, however, can be complicated. What should you consider when attempting to calculate the cost of building your own home? Don’t you just calculate price per square foot?

Stop right there. Generally, you’re somewhat safe to assume that building a new custom home will cost anywhere from $80 to $200 per square foot. That being said, you should heed the complicating factors that alter your final costs by tens of thousands of dollars.

Even at a glance, it’s readily apparent that estimating the cost to build your own home is complicated by the multitude of things to consider. We compiled a list of what to keep in mind for custom home costs.

14 Things to Consider When Determining How Much it Costs to Build a Custom Home

What makes certain items cost more than others? We’ve broken down some of the most influential factors to consider before you build your ideal budget.

Property quality and prep

Is the property you’re building on prime for building? Or is it a diamond in the rough? The preparation you’ll have to perform can sway your final costs considerably. Often, lots that are inexpensive to purchase prove to have conditions that add to the cost to build. In other words, be wary of a lot that seems “cheap” when compared to others in the area. When choosing the right property, consider prep factors such as:

  • Presence of trees
  • Non-level ground
  • Presence of large rocks
  • Presence of standing water

Architectural style

So this might seem obvious.

Your standard Colonial wouldn’t seem, at first glance, as expensive as a well ornamented Italianate or a multi-column Neoclassical.

But the initial build cost isn’t only a function of décor. Why are certain styles so much more expensive? In addition to exterior decorations, certain styles demand higher quality materials, more complicated shapes, and costlier roofing.

Number of corners and gables

Your custom home’s outside perimeter influences a number of build factors. It follows, then, that more corners and roof gables result in a higher cost per square foot.


Not all foundations are created equal, but on average foundations account for 9.3% of your cost to build.

The lowest class foundations are simple slabs on graded property. Most custom homes, however, will have reinforced concrete foundations. You can quickly incur additional costs if your property requires multiple grade changes.

Exterior walls

As we mentioned, exterior decorations play a part in making your custom home more or less expensive. Changes in wall height, offsets, architectural details, irregularities, and the addition of parapets all increase your price per square foot.

Additionally, your build material of choice is key. According to the latest NAHB survey, your home’s framing and trusses account for 15% of the total price you’re your custom home. Strong masonry or brick is usually more expensive than a wood or light metal frame.

Wall finishes

Smaller budgets typically stick with hardboard, wood, or stucco siding. Stucco especially varies in price and quality. Adding things like masonry or stone veneer to your outside walls, in conjunction with architectural accents, can drive the price of your home up very quickly.

Roofing and soffits

The price of your home plan’s roof is a factor of the size, shape, slope, and covering material. Affordable roofing is single or dual-pitch with wood or concrete shake, shingles, or tiles and small soffits (the ledges that hang over the roof). Complex, multi-level roofs with slate or metal covers are naturally more expensive. Large soffits, porch covers, and roof decorations increase costs, as well.

Certain architectural styles carry expensive roofing by default. The steep, decorative roofing common in French provincial style homes necessarily command higher build prices. The same goes for Mediterranean and Spanish styles, for which red tiled roofing doesn’t come cheap.

Windows and doors

Do you want a few windows spaced conservatively around your home? Or many windows? Or maybe a massive modern window wall? Adding windows and skylights or choosing large windows can drive costs up. Vinyl is your least costly option when building a new home.

When estimating price, also consider how many exterior and interior doors you’ll want. Large, stain grade doors, as an example, can tack on thousands to your estimate, while hardboard doors are far less expensive.

Major systems

Major systems, including plumbing, electrical, lighting, and HVAC, account for an average of 16.4% of your home’s build cost, according to the NAHB survey. While you may be tempted to save money at this step, you’ll thank yourself later for splurging on your major systems. It’s better to save on cosmetics, which you can upgrade later easily, than to deal with sub-par plumbing and electrical.

Appliances and fixtures

Appliances, many of which are in your kitchen, account for 1.7% of your total cost when building a custom home. This is one factor that’s becoming somewhat cheaper with advances in materials and technology. Of course, adding more appliances and fixtures directly increases your final plumbing and electrical costs, as well.

Cabinets and countertops

According to the NAHB, cabinets and countertops accounted for an average of 5.2% of the cost to build a custom home. Kitchens are the hubs of any household, so it’s no wonder that many people choose to invest in building a great space.


Luxury homes featuring marble, granite, or terrazzo flooring are wildly expensive to build. Luxury carpet and top-quality wood flooring, too, are costly to incorporate into your custom home. In contrast, tile or vinyl floors are inexpensive and, if done properly, can look fantastic.

Additional non-living spaces

New home price calculations are usually based on the square footage of living space available. However, you may want to include additions to your home such as the following:

  • Basement (finished or unfinished)
  • Attic (finished or unfinished, also based on headroom)
  • Balcony
  • Garage
  • Porch (unattached to main roof)

Closing costs

Structurally, closing costs for building a new home are similar to those for buying an existing one, covering title records and transfers. However, when escrow closes on an existing home, both parties split closing costs. In new home construction, on the other hand, buyers generally absorb the costs that can vary from lender to lender.

You can expect additional closing costs for building your custom home: a homeowners insurance deposit, hazard insurance and tax reserves, plus some interest is required. Of course, Madison Homebuilders pays your standard closing costs, including a 1% Origination Fee on your loan, directly saving your out of pocket expenses.

Choose the Right Budget Option for You

When planning to build a custom home, try to account for each of the factors that contribute to final cost. Your homebuilder will help guide you toward the right options for your budget, but you’ll need to prioritize where you’ll put any extra money. Knowing exactly where your money is going goes a long way in making the homebuilding process fun, rewarding, and stress-free.

Madison Homebuilders provides many financing options, making it easier for you to have your dream home. Check out our house plans and contact us today!