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What Affects the Price Per Square Foot to Build a Custom Home?

3 Factors That Have an Impact on Price Per Square Foot When Building a Home

Budgeting a custom home build varies a lot when it comes to price per square foot. This should help you understand what affects the price per square foot. We’ll use a  four-bedroom, three-bath house that totals 2,500 square feet as an example. We’ll also compare this home to the same house but 500 square feet smaller (same 4BR 3Bth.) Three primary factors affect the price per square foot. When someone asks about the price per square foot to build a custom home, the answer could be all over the place. There’s a very low number where you can budget for super, super cheap, and then there’s really no end in sight for how much money you can spend. Let’s get into the square foot price factors.

Factor #1: Square Foot Pricing

The actual square footage itself is the first determining factor. Smaller homes with the same amount of bathrooms, same kitchen size, and similar finishes will cost more per square foot. Kitchens and bathrooms are the highest square foot cost in a home. Imagine that a full house cost $250 square foot to build. That includes all the open areas in the home plus the kitchen and bathrooms. The actual kitchen and the bathrooms cost much more per square foot than $250 to build those areas. When the same quantity of bathrooms and the same finishes are used in the bathrooms and kitchen, they virtually cost the same to build, which means the per foot price in a 2,000 square foot house compared to a 2,500 square foot house increases significantly.

Open Square Footage

Open footage is another term. The open areas in the home include areas such as living rooms, bedrooms, a den, any space that doesn’t have cabinets, countertops, plumbing, and more. Open footage usually has reduced electrical work. There’s probably still some lighting to cover that area, but maybe there’s no walls in that location. The space has much fewer components in that open footage area, which drives the cost per square foot down.

Reducing Budget Costs

So if you’re looking to cut costs for a $250 square foot build, you won’t get very far cutting out one hundred square feet down the middle of a living room compared to reducing back an area in the kitchen. The living room may save $150, maybe more, maybe less, but the $250 price is a combined average of a lot more than $250 and lower cost open footage areas. Your kitchen simply costs much more than $250 per foot. The fact is, smaller homes with the same amount of bathrooms and the same size kitchen costs more per square foot than a larger one.

Factor #2: Budgeting for the Bathrooms

The number of bathrooms also directly impacts the square foot price of a budget, which relates directly to the first factor. Bathrooms are expensive square footage to build. A 2,500 square foot house with two bathrooms is cheaper to build than the same 2,500 square foot house with three bathrooms. You can reduce the cost of your home by reducing the amount of bathrooms. Let’s look at how much a bathroom actually costs?

Bathroom Size and Finishes

Secondary baths add about $40,000 to the build costs and can run higher. The level of finishes in that bathroom affect the cost, but $40,000 is a good ballpark number. So if you take a bathroom out, you save $40,000. Master baths can be a lot because they’re typically much larger and usually have nicer finishes. Plan on master baths adding $80,000 and more to the build costs. Some homes have two master baths, instead of adding $40k for the second bathroom, you should probably add $80k for that bathroom. The size and finishes will determine if it’s a master bath or secondary bath.

Factor #3: Home Finishes

Exterior and interior finishes have a large impact on custom home budgets. When deciding on what to put in the home, you’re deciding on the level of finishes you want installed. We typically look at the finish level as average, custom, or upscale finishes. Everybody has a different idea of what those levels are in their mind. We try to define them as average on the lower end, upscale on the high or even crazy high, and custom as somewhere in the middle in regards to determining rough cost.

Average Home Finishes

The cheapest finishes generally include LVP flooring (Luxury Vinyl Plank,) vinyl windows, fiberglass showers, and basic drywall for the walls and ceiling in a home. These finishes are a pretty typical average finish level.

Custom Home Finishes

More expensive finishes drive up the price per square foot. These include wood windows, open beam ceilings, steam grade wood trim inside the house, stone tile floors, elaborate tile showers, and so forth. Some exotic designs add expense as well, such as tessera tile or some other mosaic design. Radiant heat flooring adds a lot of cost since it integrates with the concrete slab. Do you want a really smooth finish on your walls? A level five smooth drywall finish costs more money than skip trowel texture on a typical house.

Custom stone veneer on the outside of a home, or even on the inside too, increases costs. Any accent wall with custom stone or tile veneer will cost quite a bit of money. Some houses just have a little bit of wainscot on the outside. A custom detail on the front typically presents a nice curb appeal to the house. Costs can increase dramatically, however, when you start customizing the entire wall, or all sides of the house. Perhaps you add elegance to the foyer inside the house, that’s going to start increasing costs. When you start getting up into those custom level finishes, the price per foot just goes up and up, until you begin reaching upscale levels.

Home Design and Layout

Finishes will increase or decrease the price per square foot. If you are looking at cutting costs, finishes can help you pull that number down. You will be limited by the structure as some structure types are more complicated to build than others, which increases cost. If you want an economical design for the house, talk to the structural engineer and draftsman before initiating the layout and design of the home, but finishes count for a large chunk of budget money.

What Affects The Price Per Square Foot When You Build A Custom Home

That’s a brief rundown on three primary factors that affect price per square foot on a custom home. The square footage itself, number of bathrooms, and level of finishes ,both interior and exterior, affect the budget. Look around the website for more helpful information. Check out our resources tab and FAQ’s to learn more about pricing for building custom homes and buying land. You can also check out all of the videos on our show at realpropertytv.com.



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