How much will it cost to build my custom home? It’s one of the first questions our clients ask as we begin the exciting process of designing their new build or remodel. It should be an easy question, right? Unfortunately, it isn’t. Estimating the cost of building a custom home can be tricky due to the large number of variables at play.
The same things that make a custom home so wonderful – the endless possibilities – also make it difficult to accurately estimate the cost of building during the early stages of design. That being said, it doesn’t mean you shouldn’t try!
Understanding where the money goes and the biggest factors that impact the cost of your custom home is a great first step. Here, we’re discussing specific factors that most impact your custom home or remodel costs. Understanding these factors could impact your land selection, architecture, home size, programming, and more.
(Learn more about how architectural design fees work for custom homes and remodels here)
Table of Contents
- Custom Home Costs in 2025
- Factors That Influence Custom Home Construction Costs
- Start Your Project Planning
Custom Home Costs in 2025
Construction costs will undoubtedly influence your project’s direction. Price estimates in the earliest project stages can be tough because every home site, structure, and client is different. For initial budgetary purposes, the average range for construction costs that we’re seeing for our custom home clients as of January 2025 is $400 to $700 per square foot.
Keep in mind these costs are for construction only and do not include soft costs such as permitting costs, architectural fees, structural engineering, and costs for any other consultants your project may require.
Factors That Influence Custom Home Construction Costs
In order to better understand what variables affect the cost of building a custom home, let’s take a look at the four primary categories of cost:
- Site
- Scope/Size
- Structure Complexity
- Specifications
1. Site
Each site is unique, with its own benefits and challenges. Following is our list of top items to take into account when selecting a site for your new home. Each can have an effect on the cost of building.
- Topography: Steep sites often require extensive and expensive excavation and fill. Dirt is cheap, moving it is expensive.
- Geology, soil conditions, and vegetation. For example, expansive soils or rock formations beneath the surface will increase your building costs. Mountain property often has unique attributes that must be addressed.
- Utilities: the availability of services to a site is an important consideration, as it is expensive to bring or upgrade water, sewer, power and other utilities, as well as roads and sidewalks, to a piece of property.
- Length and grade of driveway.
- Design challenges due to lot shape, zoning, easements, setbacks and building restrictions.
- Cost of fees for permits.
- Is your lot in a community with design guidelines? This means your home will be reviewed by a design committee to ensure it meets minimum standards for design, materials, etc.
- Stormwater detention and drainage on or off-site.
- Other resilient design considerations can include (but are not limited to): flood plain, climate, snow load, noise mitigation, wildfire mitigation, etc.
2. Scope/Size
The size of your home has a direct impact on the overall cost of building it. Generally speaking, increasing the size of a project will increase the total project cost.
For example, if you are building a 4,000 square foot home and your construction cost is $500 per square foot, your cost will be $2M. If, during the design process, you decide to add an additional 500 square feet to your home, it will increase your total cost by $250,000.
Remember, size isn’t everything. Specifications, which we discuss below, have a significant impact on your cost per square foot. A smaller home built to luxury standards could easily cost more than a larger home built with only the basics.
3. Structure Complexity
A complex house is always more expensive to build than a simple house. This is partly a function of the shape of the house and the relationship between the amount of roof and the amount of foundation to the area of the home.
- Homes with long rectangular plans mean more walls for the same square footage.
- Ranch plans are more expensive than two-story homes because they require more foundation and more walls for the same square footage.
- Angles are more expensive than square corners; curves are more expensive than straight lines.
- Every corner and elevation change increases the cost of the foundation.
- Creative designs that require extraordinary structural members to span long distances become very expensive.
- The height of walls needed to create large volume spaces is costly because of safety concerns during construction due to the difficulty of installation.
Large swings in price can occur depending on a home’s structure and complexity. This is often where value engineering, in conjunction with the builder’s expertise, is required to keep a project within budget.
4. Specifications
Specifications can be broken down into three main categories: structural, finishes and systems. This is another area where large swings in price can occur, and why we recommend a design build workflow involving the builder and interior designer from the start. Assembling and including your whole team in the architectural design process will give you a better understanding of overall costs throughout the process, and how design decisions impact your budget.
Structural
Structural considerations include the quality and size of materials as specified by the engineer to build the shell of the home. Large and custom structural materials are more expensive. Materials for building a net-zero or energy-efficient home cost more now, but can save you money in the long run.
Some local governments and jurisdictions are beginning to include minimum green building requirements in their code language. Colorado in particular has updated its code language to include minimums for solar-ready and all-electric systems for all new construction.
Finishes
All other things being equal, the total cost of a home built with luxury finishes versus a home built with basic finishes can vary enormously. Finishes are items that are visible and important to the eye – the ‘touch, see, feel’ – elements of a custom home. Cabinetry is a great example: a whole house package of cabinetry can cost anywhere from $20K for the basics to over $250K for top-of-the-line custom cabinetry. There are so many items that fall into this category that it can be easy to lose control of the total cost. Even a small increase in the cost of each item can impact the bottom line.
Examples include:
- Windows
- Cabinetry
- Millwork: trim and moldings
- Surfaces: this includes items such as flooring, countertops, backsplashes, bath surrounds, exterior walls, roofing, decks, patios, drywall, glass/mirrors, etc. Examples include:
- Exterior walls: brick and thin stone add 30% over the cost of stucco.
- A level 5 drywall surface can cost 40% more than a level 2.
- Quality solid surface counters can be installed for $20 per square foot. An Iron Red granite or other premium material can set you back $100+ per square foot.
- Fixtures: lighting, plumbing, etc.
- Appliances
Systems
Systems are not something you can touch and see every day, but they have a huge impact on the comfort and functionality of your home. Systems include HVAC (heating, ventilation and cooling), thermal wall systems, home technology, geothermal, etc.
Start Your Project Planning
Embarking on a custom home build or remodeling project is a major life decision! Knowing where the money goes will help you establish your priorities and budget.
There are so many things to consider and select that it can feel overwhelming. That’s why hiring an experienced team as early as possible makes all the difference. At KGA, we love what we do, and we’re with you every step of the way throughout the architectural design process to make it as stress-free as possible.
Learn more about custom home and remodel design costs:
- How Do Architectural Design Fees Work for Custom Homes?
- Tips to Keep Your Custom Home Budget in Check
We’d love to hear from you and learn about your project ideas! Contact us for a complimentary consultation.
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