Buying a new home is a dream come true, but it entails many important decisions at every stage. If you are searching for a new home, you may consider some alternative options to buying a previously owned or "used" home. An obvious consideration is building a custom or semi-custom home to your specifications, but you start to wonder "how much does it cost to build a custom home?"  

As a smart buyer, you need more information to feel confident in making your final choice between investing in a custom home build versus an existing home.  


Why Build a Custom Home?  

Building a custom home provides the opportunity to design your home in a way that best suits you and your family's lifestyle. You can create your own floor plans and other personalizations with a fully custom build. Many decisions are left to you, so a fully custom build does require consistent involvement and energy. 

An alternative to the custom build for many homebuyers is the ​semi-custom home build, which ​provides a pre-designed floor plan with your own interior and exterior finish choices, giving your home a custom look and feel. Semi-custom homes have a shorter design/planning period and therefore take less time to complete than fully custom homes. Semi-custom homes can also save you money. By using an existing floor plan design, the electrical, plumbing, and additional engineering is already fairly complete. 

Both building options have pros and cons depending on your home project priorities and preferences. But let's explore the specifics on building a custom home. 


Limitless Personalization Opportunities  

Whether you want to focus on environmental initiatives such as LEED certification or turning your newly built home into a smart home, the options are nearly limitless to creating a space that is truly your own. The only limits are determined by your budget, which we review with our homeowners several times before the construction process begins. Having a strictly itemized allowance for finishes,  appliances, etc. is important to keeping within your budget and avoiding any financial surprises throughout the process.  


Open Collaboration Between You and Your Builder  

When you decide to build your custom home, you have the chance to collaborate with your contracted builder through a design-build contract to determine your project's goals, personalization and design features, budget, level of finish, site considerations, energy efficiency and engineering.  


Building a Custom Home Offers Higher Quality  

Home buyers who choose to build a custom home enjoy a higher quality finished project. Unlike production-built homes, custom homes are built with more attention to detail. From every cabinet knob to the perfect shade of paint, our collaborative build process allows insight into all the selections options there are available. 


How Much Does a Custom Home Cost?  

According to the National Home Builders Association, the average cost to build a home in Ohio in 2019 was $105 per square foot. A 1,500 sq ft home would approximately cost $157,000; a 3,000 sq ft  home would be $315,000; and a 5,000 sq ft home would be $525,000. These are average costs -- a custom home can vary dramatically in price, depending on finishes, size, and location. 


What Affects Your Custom Home Cost?  

When asking that vital question of "How much does it cost to build a house?", there are a few vital components to understand, explaining why some costs are necessary and how they may improve the final product.  



Location is likely the most important variable to a home buyer when it comes to building a custom home. Lot prices in the city versus in the suburbs can differ greatly. The property costs of specific neighborhoods that are in high-demand due to land scarcity, desirable school systems, walk-ability, etc. can take a large chunk out of a new construction home budget.  

For example in our Greater Cincinnati area, a 0.31 acre lot in Mount Lookout is $140,000, but a 0.26 acre lot in Silverton is only $20,000. A 0.287 acre lot in Blue Ash is $100,000, but a 0.5 acre lot in Milford is only $30,000.  


TIP: If you're struggling to find a lot by searching on popular real estate websites such as Zillow or, reach out to the custom builder you're considering working with to see what lots they may have available. Builders buy desirable land with the intention of offering it to potential clients, and often don't have these lots listed online. 


Size and Design 

Since much of the cost is derived from the square footage of your home, it is easy to conclude that more footage equals a higher cost. From a design perspective, a single-story home is typically more expensive to build than a two-story+ home. There are many reasons why it's less expensive to build up rather than out:  

  1. Building up means a smaller foundation area, spending less money on this labor and materials. 
  2. Building up means a smaller roof area, spending less money on this labor and materials. 
  3. Building up means you can build on a smaller lot, saving money on a lot while still getting the  square footage you desire in the home. 


Finishes and Fixtures  

The opportunity to express your design style through finishes and fixtures can be a gift to the eye, but a stretch on your wallet. The quality of appliances and materials you choose for your home greatly affect the total cost.  

For example, granite counters listed on HomeDepot's website range from $40 to $100 per sq ft. HomeAdvisor estimates the average kitchen features 60 sq ft of counter space. If you chose the lesser expensive granite, your kitchen counters could cost you $2,400. If you chose the more expensive granite, your kitchen counters could cost $6,000. $3,600 may not seem like a big difference, but when you're making similar choices like these for every room of your new home, funds spent on finishes can add up quickly. 

When you select a builder for your home, it's key to have every single finish and selection itemized in an allowances budget to ensure throughout the pre-construction phase that you're projected to stay within budget. 


Are You Ready to Start Building Your Dream Home?  

Redknot builds homes for most clients with final prices in the range of $500,000 to $1.5M. Semi-custom homes, depending on lot price, design, and finishes can help reduce the price of a home substantially.  

If you're interested in building a custom or semi-custom home, contact our team at Redknot Homes to learn more about our build process and available homes and lots.