Leszek Glasner / Shutterstock.com
Buying a home is particularly daunting right now, with interest rates on an average 30-year fixed-rate mortgage at over 7% to start the month. As the Federal Reserve continues to fight inflation, more hikes are likely.
For those willing to own but not willing to pay the usual rates of interest in this congested economy, one option is to buy land instead – and then build your own home.
In some states, the cost savings can be really impressive, according to a new study by storage company StorageCafe. It finds that building a home is cheaper than buying it in more than a third of states. In several cases the savings are close to or in the six figures.
Below are the states where those building a home can save the most compared to buying it.
10. Idaho CSNafzger/Shutterstock.com
Average listing price for a single family home: $575,000
Total cost to build one house: $505,000
Cost savings: $70,000
Idaho had the fastest growing population in the country as of 2022, which put tremendous pressure on the housing market. Building your own home can save you a lot of the expense and frustration of buying it.
9. Florida VIAVAL TOURS / Shutterstock.com
Average listing price for a single family home: $451,000
Total cost to build one house: $375,000
Cost savings: $76,000
Not only are real estate prices sky high in the Sunshine State, but in some major cities, homebuyers will likely be competing with people willing to pay cash, as we recently reported. If you can’t, that’s all the more reason to start from scratch.
8. Montana Jon Bilous / Shutterstock.com
Average listing price for a single family home: $599,000
Total cost to build one house: $515,000
Cost savings: $84,000
Builders in Montana will enjoy the largest average lot size in the Rocky Mountain region — just over a third of an acre, according to StorageCafe.
7. Maryland KhanIM / Shutterstock.com
Average listing price for a single family home: $460,000
Total cost to build one house: $365,000
Cost savings: $95,000
“Inventory [in Maryland] is low, not only because of rapidly rising mortgage rates, but also because there isn’t enough new housing,” says The Baltimore Banner. You could be part of the solution – and save almost 100,000 in the process.
5. Delaware (tie) mandritoiu / Shutterstock.com
Average listing price for a single family home: $490,000
Total cost to build one house: $394,000
Cost savings: $96,000
In addition to the savings from building your own home, think about future savings. Delaware is among the “9 states with the lowest property tax rates” as we noted last year.
5. Virginia (tie) JoMo333 / Shutterstock.com
Average listing price for a single family home: $458,000
Total cost to build one house: $361,000
Cost savings: $96,000
Homeowners in the Richmond area get better square footage for their money in the Virginia state capital than in most other parts of the country, but builders could do even better.
4. Utah Jason Finn / Shutterstock.com
Average listing price for a single family home: $635,000
Total cost to build one house: $538,000
Cost savings: $97,000
Utah has the largest average living area in the country, and if you start building today, you won’t stand out. The typical house here was built in 1989, which also makes Utah one of the “youngest” states in terms of the age of the place of residence.
3. Colorado Jacob Boomsma / Shutterstock.com
Average listing price for a single family home: $600,000
Total cost to build one house: $492,000
Cost savings: $108,000
Despite the surge in the number of homes for sale in markets like Colorado Springs — almost triple the number a year ago — prices remain stubbornly high, Colorado’s The Gazette notes. It makes sense that some would rather start from scratch.
2. California Simone Hogan / Shutterstock.com
Average listing price for a single family home: $700,000
Total cost to build one house: $495,000
Cost savings: $205,000
The aggressive home bidding wars we saw a year ago are easing in some California markets, as we recently noted in “10 Housing Markets Where Bid Wars Are Gone.” But the savings generated by the build might be too tempting to wait for a California dream home to hit the market.
1. Hawaii Tom Robertson / Shutterstock.com
Average listing price for a single family home: $1,045,000
Total cost to build one house: $551,000
Cost savings: $494,000
You could essentially build two homes — one would be slightly smaller — for the price of an average single-family home already on the market in Hawaii. Of course, you must first find the country, which can be more of a challenge than in non-island countries.
