Dahl Custom Homes | Factors That Influence Home Building Costs
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Factors That Influence Home Building Costs

The first and most important step of planning your home is determining your budget and it’s probably the most befuddling for most people. This list of top factors that influence home building costs should get you started. The top 4 categories are location, size, design, and operational efficiency.


The first decision you’ll be making is where you want to live. Location includes the actual “where” of your home as well as land characteristics, and supply and demand. Ultimately, the region you choose will need to be based on your preferences because whether you wish to be in the city or the country, each location will bring with it certain savings and expenses. And when an area is growing rapidly, it will likely cost more due to high demand. High demand can also drive up subcontractor costs. If you’re more interested in funneling your budget into your home itself, this knowledge can help you save a bit when you choose your building location. One other aspect of location to consider is the characteristics of your plot of land, such as slope which decides grading, foundation depth, need for retaining walls, etc. 

Size (and Shape)

Size and general structure (shape) will be the first step in planning your home. Size covers square footage, number of stories, number of rooms (especially bathrooms), and wall and ceiling heights. And believe it or not, size does not always equate to “cost per square foot.” Exterior complexity factors greatly into the cost, for example a simple 2,600-square-foot four-corner home will be cheaper than a ten-corner home of the same size. Additionally, price per square foot usually goes down when you have two stories to provide more square footage to allocate to the underlying costs of systems and foundation. For example a single story ranch will often cost more on a per square foot basis than a two story colonial with a similar foundation. 


  • This is where the options really start adding up. Here are several of the design aspects that can drive up costs with complexity and choice of materials:
  • Roof
  • Exterior finishes such as siding, and special external design elements such as a cupola or porch, or stone
  • General quality of materials for internal finishes such as flooring, trim, hardware, surfaces, and cabinets
  • Appliances, furnishings, lighting
  • Optional “luxury” features such as a pool, indoor sauna, or outdoor kitchen
  • Green features are typically more costly at the outset
  • Major systems like heating, electrical, and plumbing

Operational Efficiency

Operational Efficiency is all about how the builder runs their business. Finding a builder with a solid reputation building your style and size of home in your area can make all the difference. They will solve problems up front, have important depth of knowledge and have connections with suppliers and subcontractors.

The team at Dahl Custom Homes is here to help you with any and all of your Corridor custom home needs, so please don’t hesitate to contact us if we can answer any questions or provide you with more information.

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