10 States Where Building a Home Beats Buying One

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Happy couple walking through new home under construction
Leszek Glasner / Shutterstock.com

Buying a home is especially daunting right now, with interest for an average 30-year fixed-rate mortgage topping 7% as of the start of the month. As the Federal Reserve continues to battle inflation, more increases are likely on the way.

For those ready to own but not ready to pay the going rate in this overcharged economy, one option is to buy land instead — then build your own home.

In some states, the cost savings can be truly impressive, according to a new study from storage company StorageCafe. It finds building a home is cheaper than buying in more than a third of states. In several cases, the savings are near or in six figures.

Following are the states where those who build a home can save the most compared with buying one.

10. Idaho

Boise, Idaho neighborhood
CSNafzger / Shutterstock.com

Median single-family home listing price: $575,000

Total cost to build a home: $505,000

Cost savings: $70,000

Idaho had the fastest-growing population in the country in 2022, which put enormous pressure on the housing market. Building your own home might circumvent a lot of the expense and frustration of buying.

9. Florida

Ybor City, Tampa, Florida
VIAVAL TOURS / Shutterstock.com

Median single-family home listing price: $451,000

Total cost to build a home: $375,000

Cost savings: $76,000

Not only are housing prices sky-high in the Sunshine State, but in some major cities, homebuyers will likely compete with people willing to pay in cash, we recently reported. If you can’t do the same, it’s all the more reason to start from the ground up.

8. Montana

Missoula, Montana
Jon Bilous / Shutterstock.com

Median single-family home listing price: $599,000

Total cost to build a home: $515,000

Cost savings: $84,000

Homebuilders in Montana will enjoy the largest median lot size in the Rocky Mountain region — a little more than a third of an acre, according to StorageCafe.

7. Maryland

Columbia, Maryland
KhanIM / Shutterstock.com

Median single-family home listing price: $460,000

Total cost to build a home: $365,000

Cost savings: $95,000

“Inventory [in Maryland] is low not only because of rapidly increasing mortgage rates, but also because there isn’t enough new home construction,” The Baltimore Banner says. You could be part of the solution — and save almost 100 grand doing it.

5. Delaware (tie)

Wilmington, Delaware
mandritoiu / Shutterstock.com

Median single-family home listing price: $490,000

Total cost to build a home: $394,000

Cost savings: $96,000

In addition to the savings realized through building your own home, think of the future savings too. Delaware is among “9 States With the Lowest Property Tax Rates,” we noted last year.

5. Virginia (tie)

Chesapeake, Virginia
JoMo333 / Shutterstock.com

Median single-family home listing price: $458,000

Total cost to build a home: $361,000

Cost savings: $96,000

Richmond-area homeowners get better square footage for their money in the Virginia state capital than in most of the country, but homebuilders might be able to do even better.

4. Utah

Jason Finn / Shutterstock.com

Median single-family home listing price: $635,000

Total cost to build a home: $538,000

Cost savings: $97,000

Utah has the largest average home size in the country, and if you start building today, you won’t stand out. The typical home here was built in 1989, making Utah also one of the “youngest” states in terms of home age.

3. Colorado

Glenwood Springs, Colorado
Jacob Boomsma / Shutterstock.com

Median single-family home listing price: $600,000

Total cost to build a home: $492,000

Cost savings: $108,000

Despite the increasing number of homes for sale in markets like Colorado Springs — nearly triple from a year ago — prices remain stubbornly high, Colorado’s The Gazette notes. It makes sense some would prefer to start from scratch.

2. California

Southwestern drought tolerant landscaping with succulents in Southern California
Simone Hogan / Shutterstock.com

Median single-family home listing price: $700,000

Total cost to build a home: $495,000

Cost savings: $205,000

The aggressive bidding wars over homes we saw a year ago are abating in some California markets, as we recently noted in “10 Housing Markets Where Bidding Wars Are Disappearing.” But the savings realized through building might be too tantalizing to wait for a California dream home to come on the market.

1. Hawaii

Kalului homes Maui Hawaii
Tom Robertson / Shutterstock.com

Median single-family home listing price: $1,045,000

Total cost to build a home: $551,000

Cost savings: $494,000

You could essentially build two homes — one would be slightly smaller — for the price of one median family home that’s already on the market in Hawaii. Of course, you’ll first have to find the land, which may be more of a challenge than in non-island states.

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