Buy or Build a House: Pros, Cons, Costs and How Long It Takes

For lots of folks, building their own home is a dream. Because let’s be real—home is where most of life’s sweetest memories are made. And who wouldn’t want to make those lifelong memories in a brand-new home built exactly the way they want. Sounds like a great idea, right?

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But, like anything else custom-made, building your own home takes more time and money. After all, brand-new things usually do come with a higher price tag—which means that building a home might not be for you (at least not right now). To help you make the best choice, let’s break down the pros and cons, the cost, and the time it takes to build a house.

Buying vs. Building a House: The Pros and Cons

If you’re house hunting, chances are you’ve lost a few hours scrolling through listings. And at some point, the thought creeps in: How much would it cost to just build my own house?

Maybe the higher price tag feels worth it. Or maybe building is a nightmare waiting to happen. The truth is, it really depends on you—your budget, your timeline and your goals. When I’m faced with a big decision (and let’s be honest, what’s bigger than building a house?), I like to start simple—with a good old-fashioned pros and cons list.

The Pros and Cons of Building a House

First things first—let’s take a look at the big picture here. Like I said, building your own home can seem like a dream come true (and in many ways, it is!). But here’s the truth: Building isn’t all sunshine and Pinterest boards. It comes with trade-offs you’ll need to think through carefully.

Pros

• Customization: Building a house from the ground up lets you personalize it to suit your lifestyle and tastes—everything from the layout, cabinets and flooring to the sinks, lighting and doorknobs! Even cookie-cutter homes built in subdivisions allow for some customization in colors, flooring and certain finishes. So, whether you’re after a rustic feel or a fancy art deco vibe, you can make these style choices early on.
• Low to no competition: When you own land to build your home on, you obviously have zero competition with other buyers.
• Little maintenance: Since new homes must meet current building codes and have up-to-date technology, you probably won’t have to worry about big repairs or maintenance issues for the first few years—less chance of a leaky roof or failing HVAC system for you.
• Low energy costs: New homes often feature the latest energy-efficient systems and materials, which usually lead to lower energy bills.
• Newness: You get to start fresh as the first owner of your home and enjoy brand-spanking-new everything. I love that new-house smell, don’t you?

Cons

• Price: One disadvantage of building a house is that it costs more than buying an existing home. That’s not so bad if you’re able to budget for it, but that extra expense can be a real hang-up for some people.
• The wait: It can take close to a year to build a new house between planning, approvals and the actual construction. On the other hand, once your offer’s accepted, closing on an existing home usually takes about a month based on Zillow housing data.⁴ Plus, if you’re building, you’ll have to pay to live somewhere until your new home is ready. That means you could get stuck paying your current rent or mortgage plus the construction costs for several months. Ouch.
• No negotiations: Most buyers go into an existing home purchase hoping to negotiate a lower price. While that’s super common in the resale market, there isn’t much leeway on closing costs or purchase price with a newly built home unless your real estate agent gets creative at the negotiating table. But even then, you’ll probably get more bang for your buck with an existing home.
• Noise and mess: If you build a house where other homes are being built, you might have to deal with construction noise, equipment traffic and globs of mud along your commute. Worse, you could end up with a roofing nail or a screw in your tire. Sure, the neighborhood will eventually calm down as other homes get completed, but it’s something to think about if loud noises and neighborhood construction get on your nerves. 
• Stress: When you build a house, you’ll have to purchase land, decide on a home design, and pick out flooring, fixtures, cabinets, countertops, interior trim, exterior trim and on and on—all while staying within your budget. Managing all the details and nickel-and-dime expenses of building a house takes time and effort. Don’t underestimate the stamina and patience you’ll need to make sure it’s all done the right way.
• Hidden costs: Those dollar signs you see on things like countertops, fixtures and appliances are just the tip of the iceberg. Upgrades and unforeseen problems can quickly drive up the price of your new home, and those costs may or may not be rolled into your contract price. Play it safe by budgeting to pay cash for those unexpected expenses. And don’t forget about post-move costs like landscaping and blinds—they’ll sneak up on you too.

The Pros and Cons of Buying an Existing House

Now, to keep things nice and balanced—let’s break down the pros and cons of buying an existing house on the market.

Pros

• Price: An existing home with similar features to a new home will cost you less. But when you compare the price of a new home to an existing home, make sure it’s an apples-to-apples comparison. Don’t just consider square footage or the number of bedrooms. Location also plays a huge role in price.
• Quick close: When you buy an existing home, you won’t be stuck waiting around for your builder to install cabinets or floors before you move in. Like I said, you’re usually looking at about a month to close. (That’s just enough time to get packed up!)
• Room to negotiate: As a buyer, you can negotiate the price with the seller. You can also negotiate on things like repairs that need to be done to the house.
• Location: The money you save by buying an existing home could help you afford a home in that neighborhood you’ve always loved. And as they say in the real estate business, the three most important things to consider when buying a house are location, location and location.

Cons

• Repairs: As homes get older, they need repairs. A new roof or deck could set you back thousands of dollars. Something like an old, weathered deck could end up costing you a lot more in repairs than you’d expect. So always keep the house’s age and upkeep in mind when shopping around.
• Compromises: You probably won’t find a house that checks off every single need and want on your wish list, and you might have to settle for some things you don’t like.
• Updates: The previous owner’s style might not match yours—maybe the paint colors feel off or the fixtures aren’t your taste. So, budget for some updates to make it feel like home. (Maybe skip the neon green.)
• Environmental concerns: If you buy a really old home, you might run into a situation where you have to take care of mold or harmful chemicals like lead paint or asbestos tile.
• Hidden problems: Even after you get a home inspection, you could still find problems the inspector missed. (And I 100% recommend getting a home inspection before you buy a house. Don’t skip that part!)

So, those are the quick-hit pros and cons to get you started. Next, let’s dive deeper into the finer details you’ll need to know. First, let’s talk dollars.

Is It Cheaper to Buy or Build a House?

The average cost to build a new home in 2024 was $665,298 according to a survey by the National Association of Home Builders.⁵ Meanwhile, the average cost to buy an existing home was about $510,900 at the end of 2024.⁶

When you do a little quick math, you’ll see that buying an existing home instead of a new one could save you over $150,000. That’s a lot of money!

Buying something new is almost always more expensive than buying something pre-owned. Think about what jeans from a thrift store cost compared to buying them new from a department store.

And thanks to inflation, builders are also paying more for building materials and other resources they need, like workers and fuel. All that to say, building a house is not cheaper than buying.

Breaking Down the Average Cost to Build a House

Now that you have an idea of the total cost to build a house—let’s break it down in detail.

Sales commission	$18,955
Financing costs	$10,220
Lot	$91,057
Permits, fees, plans	$32,719
Foundation	$44,748
Framing	$70,982
Exterior work	$57,510
Plumbing, electrical, HVAC	$82,319
Interior finishes	$103,391
Final steps, landscaping	$27,710
Builder’s profit	$72,971
Miscellaneous costs	$52,716
Total	$665,2987

That’s definitely a big price tag! But remember, these are averages. Plenty of homes are built for less—and some are built for more. And let’s keep in mind that where you build can have a big impact on costs too. At the end of the day, your exact cost depends on your situation.

Can You Afford to Build a Home?

Now that you know the typical cost to build a house, how are you going to pay for it? If you’re able to, you should use cash. Nothing beats owning something free and clear! But most people don’t have that much cash just lying around and have to take out a mortgage whether they’re buying or building.

First, figure out how much house you can afford. When building, you’ll also need a construction loan—usually with a one-year repayment term. It’s part of the same deal as your mortgage with the same bank. Once the home is finished, the loan and your payment roll into one mortgage that covers both the land and the house. And that brings us to the next chapter in our homebuilding journey: time.

How Long Does It Take to Build a House?

So, you’ve run the numbers and decided you can afford to build a home. Nice! But here’s the next big question: Do you have the time?

Let’s see what the latest U.S. Census Bureau data says.

• Built by landowner: If you already own the land and plan to manage the build yourself, expect the long haul. On average, it takes almost two months to get all the permits and approvals and over 13 1/2 months to finish construction. That’s roughly 15 1/2 months from start to finish.
• Built by contractor: If you hire a contractor to build on your land, the process speeds up quite a bit. You’ll spend over a month on permitting and a little more than 10 1/2 months on construction—about a year total.⁸

Keep this in mind: At the end of the day, build times can swing quite a bit depending on your situation. So think of these numbers less like strict rules and more like ballpark benchmarks. The timeline for your home depends on the choices you make—your design, location and builder.

Bottom line? If you’re financially ready to build the home of your dreams, give yourself plenty of time along the way.

 

How to Build Your Own House

If you’ve crunched the numbers and decided that building a house is the direction you want to go, that’s super exciting! But before a big crew of guys in hard hats shows up, you need to know how to build your own house.

No, you won’t have to grab a drill or a hammer and climb up on the roof. But there are some steps you’ll need to take if you want the homebuilding process to go smoothly. Here’s a look at the four most important steps.

Hire a real estate agent.

Building a house isn’t something you’ll want to do without the help of a real estate agent—that would be a one-way ticket to a lot of mistakes and stress. You need a top-notch buyer’s agent on your side who can represent you through the entire homebuilding process.

A good agent will help you find land to buy, and they’ll serve as your advocate by helping you communicate with your builder and architect during the whole building and moving process.

The best place to find a high-quality agent is our RamseyTrusted^® real estate program. Because look, building a home is no walk in the park. But with a rock-star RamseyTrusted agent on your side, the whole process will move a lot smoother—that means less stress and more confidence.

Make a budget.

It’s your job to make money decisions on paper, on purpose, before the first shovel hits the dirt. You have to make a budget for your homebuilding project just like you would for your family or business.

Start by deciding how much you can afford to spend. (Keep in mind that your monthly house payment should be no more than 25% of your take-home pay.) Then, research all the expenses involved in building a home (permits, framing, etc.) and figure out how much money you’ll need for each category. Your agent can help you with that.

Once you make your budget, stick to it! That’s the only way it can actually help you. Otherwise, it’s nothing more than a great idea on paper.

If you do try to build without a budget, you might have to cut corners at the end of the project or take on extra debt to get the job done. Talk about turning your dream home into a nightmare!

Create a blueprint.

A detailed blueprint or building plan is a must. This is where all the key decisions about the house itself will be made. How many bedrooms? How many bathrooms? Where will the windows go? All of those questions (and many more) will be answered in your blueprint.

Whether you hire an architect or a draftsman to draw your plans, make sure they’re working together with your builder. (Pro tip: Using a draftsman instead of an architect is cheaper.)

Once you make your decisions, you need to stick with them. Making a couple of changes during the building process is no big deal, but anything more than that could bust your budget and cause some big-time delays in your schedule. Speaking of your schedule . . .

Set a detailed schedule.

A detailed schedule is the key to your homebuilding project not taking an eternity to complete.

How much detail do I need? A lot. You need to know exactly when the framers are going to start nailing stuff. When the painters are coming and which rooms get what colors. When and where the bushes are going in. Get the idea?

When you take the time to work with your builder to write up a schedule with that level of detail, it allows you to schedule all your labor and subcontractors well in advance. That way, any issues with labor shortages that might pop up won’t affect you.

And if you have a detailed schedule, you can check in with your agent and builder to make sure everything’s on track. It wouldn’t be a bad idea to have a standing weekly meeting with your builder to look at your schedule, blueprint and budget. Plus, walking around and seeing your home’s progress is always fun. Just make sure to wear shoes you don’t mind getting muddy!

 

 

So, Should You Buy or Build a House?

Maybe you’re still on the fence about whether to buy or build a house. I get it—it’s a big decision, and you want to make the right choice!

If you’re a first-time home buyer, I recommend going the more affordable route and buying an existing house. You’ll save money and get some homeownership experience before you take on the challenge of building a new house. It’ll also give you time to build equity (your home’s value minus how much you owe on it). When you sell your first home, you can use that equity to help pay to build your next home.

If you’re an experienced home buyer, then building a house could be a fun adventure for you. But remember, no matter what, don’t take on a monthly payment that’s more than 25% of your take-home pay—otherwise, you could end up house poor! That 25% limit includes principal, interest, property taxes, homeowners insurance and private mortgage insurance (PMI). And don’t forget to budget for homeowners association (HOA) fees if your new home is in a neighborhood that has them.

At the end of the day, owning a house is an incredible way to build wealth regardless of whether you buy or build—just make sure you can afford the path you choose.

 

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