Do you own your lot? Are you thinking about building a new house on it?
Do you know if it’s more expensive to build or buy a new home in 2023?
We put together this guide on the cost to build a house on your lot versus buying a new home.
We’ll also look at several factors that impact the cost of a house and factors to consider when buying versus building.
Which is Cheaper, to Build a House on Your Lot or Buy a House?
According to 2022 data from the National Association of Home Builders (NAHB) and the U.S. Census Bureau, the median cost of new construction on a home was $449,000, while the median price to buy an existing house was $414,000.
However, this data also shows that there’s been a significant drop in costs for those who can build on their own land.
In a separate study from the NAHB with data going back to 2019, the average purchase price for a plot was 18.5% of the total costs of constructing a new house. Therefore, removing the cost of the lot drops the cost of building a new home to $365,945 for people who own a lot.
Whether or not it will be cheaper to build a house on your lot or buy one depends on several factors. Some factors include the inventory of local homes, your location, your timeline, and the price and availability of labor and materials.
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Cost of Building a House on Your Lot
Several factors can affect the cost of building a house on your own lot.
Cost to Build a House By Its Size
December 2022 data from Home Advisor indicated that the average cost to build by size is approximately $150 per square foot.
Let’s take a look to see what the means for different house sizes:
|# of Square Feet||Cost to Build Per Square Foot|
Cost To Build a House in Oregon and Washington
While how much it costs to build a house is essential, so is where you’re going to build it.
Building a 2,000-square-foot house will cost:
- $341,00 in Oregon
- $343,00 in Washington
Construction Management Fees
You will typically need a construction management firm to oversee your home-building project.
It’s an excellent idea to work with a trusted and experienced company like True Built Home that focuses on building homes instead of overselling.
Why Work With True Built Home?
Lewis Mann founded True Built Home to help homeowners build the best homes for the cost while educating homeowners about precisely the products and features included.
Let’s consider a few reasons to trust True Built Home to build your dream house.
High-Quality Home Features
True Built Home believes in using the best building materials and quality fixtures and finishes to ensure that your home looks fantastic. And that you want to live in it for a long time.
Standard Features Included:
- Energy-Efficient Windows
- High-Quality Quartz Countertops
- Top-Rated Roof Shingles
- Long-Lasting Lap Siding
- Raised-Heel Trusses
- Quality Wood Framing
- Better Insulation
- High-Efficiency Heating
- And more…
When you choose the home plan and the location you’d like, True Built Homes will give you the price on that individual home’s page. This price is the total cost of the house, including the foundation, fixtures, and finishes.
Our pricing includes the high-quality standard features above. And if you’d like to customize your plan, you can work with our design team, who will provide an estimate and make those changes to the plan for you.
Award-Winning Communication Platform
True Built Home offers an online platform that provides easy access to your new home’s details.
Our award-winning online communication platform can help you:
- Provide Access to Important Documents
- Track Project Progress and Milestones
- View Project Photos
- Easy Messaging for Questions, Answers, and Comments
- Show Warranty Information
Frequently Asked Questions
Is it cheaper to build on or build up?
As a rule, it’s cheaper to build on rather than build up. Typically building up requires additional materials and labor and specialized equipment like cranes and lifts.
Building on is frequently faster and more efficient. It does not require the same coordination and planning level as building up.
Accessory dwelling units (ADUs) are excellent examples of building out.
ADUs provide additional living quarters you can build on single-family lots. You can use ADUs to give you more living space, increase the value of your property, and rent them out as passive income.
What are the disadvantages of building a house on your own lot?
There are several cons to building a house on a lot you own, including:
- Longer Construction Timeline
- Limited Flexibility in Negotiating Pricing
- Unexpected Out-of-Pocket Expenses
- Construction Traffic and Noise
- Extra Landscaping Responsibilities
You can remove many disadvantages by working with a contractor you trust and communicate well with during construction.
Working with a trusted contractor can help you plan the home of your dreams and build it on schedule and budget.
Is it better to build on your own lot?
Yes, it is often better to build on your own lot versus buying a new home on an existing lot.
Building on your own lot offers many advantages, including:
- Ability to customize the house
- Control the timing of construction
- Choosing a Location
- Potential for larger profit
- Choosing a builder
- Tax benefits
- More outdoor space curb appeal
- No size restrictions on what your building
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Building a House on Your Lot Can Be Cheaper Than Buying a New Home
On average, buying a new home is less expensive than building a new one. However, if you own the lot you want to build on, in many cases, it’s cheaper to build a new home on your own property.
The size and location of where you want to buy or build a new home are two factors to keep in mind when weighing your options.
If you’re building on your own lot in western Washington and Oregon, working with a trusted home builder like True Built Home that’s focused on building the best house you can get for the cost can save you time, money, and stress.
Taking the time to find or build a dream house that you and your family can live in for decades can be exciting and a sound financial investment.