Cost To Build A Custom Home

Image of craftsman style home in Texas.

The limited housing inventory experienced nationwide has led homebuyers to search for alternative options. Rather than endlessly scrolling through real estate listings for their dream home, many individuals with disposable income have decided to build their custom dream homes instead. From the foundation to the cabinet finishes, we’ve compiled a comprehensive guide detailing the cost to build a custom home in Texas.

National & Regional Average Cost

The cost to buy a home versus building a home can vary depending on several factors, such as location, size, materials used, and local real estate market conditions. In general, buying an existing home tends to be less expensive upfront compared to building a new home. However, building a new home can offer several advantages, including customization, energy efficiency, and the ability to select high-quality materials.

Texas Home Prices

The average home price in Texas doesn’t vary much from the national average coming in at $290,863. The estimated average cost to build a custom home in Texas hovers around $325,000. However, in some circumstances, that may or may not include the cost of land.


Prices for land, whether in rural or urban areas, will vary nationwide depending on your location. In Texas, the average cost for land in a rural area in 2022 per acre was $4,315, according to the Texas Real Estate Research Center.

If you’re looking to build a house on a small 1-acre or 5-acre plot, your cost will be significantly smaller than if you wanted to build a custom home on a 20 or 40-acre parcel. Additionally, land in an area that is off-the-beaten-path will be significantly cheaper than buying land in a major city like Austin.

Finding A Contractor or Builder

One of the crucial steps in the custom home building process is choosing a contractor or builder for your project. Plan to spend significant time with your contractor while the two of you finetune your custom home’s design and overall details.

Once plans are finalized, the builder will start preparing the site by clearing the property and laying the foundation. Typical contractor fees range between 10% to 20% of the project’s total cost. So if you had an estimated $280,000 home, expect to pay an additional $28,000-$56,000.

Foundation & Infrastructure Costs for a New Home

Concrete Foundation Costs

A concrete slab is a typical method for the foundation of a custom home and one of the first steps in the custom home building process. The estimated costs are generally based on the square footage of a home—costs for a foundation range between $5 to $37 per square foot.

Cost of General Infrastructure

If you purchased a parcel of land in a rural area, infrastructure costs such as installing a septic system, drilling a well, and building a road would be significantly more expensive than purchasing a plot of land within a city’s limits. However, within city limits, most of the infrastructure is already established and would require a contractor to connect your property to existing water and sewer lines. Contact a local contractor in your area to find up-to-date estimates or quotes.

Electrical, HVAC, & Plumbing

Before the contractor can break ground, there is a long checklist of tasks to complete. During the process of laying the foundation, the sewer, water, and electrical lines will need to be identified. Each region will have varied costs, but skilled electricians charge $35 to $100 an hour in Austin. In addition, the average price for a plumber in Austin is $40-80 per hour.

New Construction Prices

Home Building Permit Costs

Building a new home comes with the usual red tape and necessary permits. Each municipality will provide a residential building plan review and permit fee process on their local website. The city of Austin regularly updates its residential permit fees, and your hired contractor will help you through this step.

Cost of Lumber

Due to inflation and other supply chain issues, lumber prices nationwide have been at an all-time high in recent years. While lumber prices have slightly dipped since the start of 2023, the costs remain inflated. It is estimated that lumber makes up nearly 8% of the cost of a new home. Ask your contractor for up-to-date lumber costs and building materials in your region.

Finishing Touches

Similar to lumber, the cost of drywall, appliances, windows, doors, and other building materials remains high. With continued demand and limited supply nationwide, expect to pay more until the market levels off.

Cost of New Appliances

If you’re looking to purchase a brand-new refrigerator, dishwasher, washer & dryer, and stove for your custom home, expect to spend upwards of $10,000. But, again, costs will depend on the model and amenities of the appliances you choose for your home.

Windows & Door Prices

Windows and doors are costly. The average cost for windows in 2023 ranges between $575-$1,225, depending on the size and style.

Fixtures & Hardware

For many families, the kitchen is the heart of the home., Adding the finishing touches that add warmth and personality to your kitchen, like cabinets and countertops, isn’t cheap. An average kitchen remodels costs upwards of $25,000.

Landscaping & Outdoor Patio Pricing

As the projects on the interior wrap up, the exterior projects are just beginning. Some homeowners prefer to do some of the landscaping and gardening work themselves, while others may not have a green thumb. If you’re in the latter category, landscape labor, and contractors generally cost $50-$100 per hour.

Lakeside Custom Homes

Are you ready to design and build your Texas Hill Country custom dream home? Contact Lakeside at Tessera to schedule a tour of a custom home model. With numerous floor plan options and proximity to amenities and outdoor recreation, Lakeside is the place for your next home.

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