Designing and constructing a home in the Lone Star State is an experience unlike any other and when it comes to expenses, it’s not all about oil wells and ranches. The average cost of building a home in Texas is between $120 to $160 per square foot depending on the location, size of the home, material, quality, and design, labor, finishing, and wealth Custom and luxury touches can push that even higher. For a 2,000-square-foot house, that would place the cost between $240,000 and $320,000, not including land and other costs. But what does the cost contain, and how can you plan for it sensibly?
This guide also explains what’s driving those costs and offers advice on where to buy land, how to choose the right builder, and how certain types of financing, such as construction loans, can help make your Texas homebuilding dream come true.
Factors That Influence the Cost of Building a Home in Texas
Location
Texas is a huge state, and construction costs can vary dramatically depending on whether you are building in rural West Texas or urban enclaves like Dallas, Austin or Houston. Labor and material are usually more expensive in urban areas, but are better served by amenities.
Land Costs
Where to Buy Land First things first: You need land before you can build. Land can be cheap or expensive. And in rural areas, a piece of land may go for less than $10,000 an acre, while prime zones outside top-tier cities can top $100,000 per acre. Where to buy land in Texas If you’re like many Texans thinking about the dream of home ownership, you’re probably wondering where to buy a house in Texas that meets all of your criteria. (We’ll help with that as well in another blog!) And, I would argue, you’re NOT going to be looking for a fixer upper, because where you end up buying land in Texas matters. Both access to utilities, growing infrastructure, and favorable zoning regulations that actually make building a possibility!
Design and Customization
Design has an enormous impact on cost of the home. A basic design with midrange finishes will cost less than a custom design with luxury upgrades. A semi-custom home builder can help you balance affordability and customization, and to make the best decisions without building from the bottom up.
Labor and Materials
Texas labor costs are fairly competitive with those in coastal states, but material costs might vary. Prices for lumber, concrete and steel all affect the total cost of building. Local accessibility could also be a factor and ‘use of local’ can help reduce shipping and logistical costs using local resources.
Breaking Down the Average Costs
| Category | Estimated Cost Range |
| Land Purchase | $10,000 – $100,000+ |
| Site Prep & Permits | $5,000 – $25,000 |
| Foundation | $10,000 – $25,000 |
| Framing | $30,000 – $60,000 |
| Roofing & Exterior | $20,000 – $40,000 |
| Plumbing & Electrical | $15,000 – $35,000 |
| Interior Finishes | $40,000 – $80,000 |
| Miscellaneous | $5,000 – $15,000 |
| Total (2,000 sqft) | $240,000 – $320,000+ |
Note: These figures do not include landscaping, fencing, or special amenities like pools or solar panels.
Financing Options for Building in Texas
If you don’t have a hundreds of thousands in cash on hand, don’t worry, there are financing solutions available for home building. Texas construction loan construction loan lenders provide financing to custom home construction in Texas, and you can take out a loan to start building your new home from the ground up. These loans typically fund the cost of land purchase, the construction costs or the land, and sometimes even soft costs, like permits and design fees.
Choosing the Right Home Builder
The price and quality of your future home will be determined by the builder you select. Here are a few to keep in mind:
- Experience and Portfolio: Choose someone with a proven track record in the type of home you want.
- Licensing and Insurance: Always work with a properly licensed and insured builder in Texas.
- Transparency in Pricing: Watch out for hidden costs. A transparent pricing model helps you stay on budget.
- References and Reviews: Feedback from previous clients is invaluable.
If you’re not sure how to select a home builder, begin with an interview. Inquire about timelines, warranty plans, subcontractors, and communication styles.
Best Builders in Texas to Consider
There are plenty of quality builders in Texas, but it’s key that you find the one that matches your vision and budget. The best home builders in Texas are known for their reliability, quality work, and attentive customer service. Most are builders that have model homes you can walk through, so you get a sense of layout, materials and finish choices.
Custom vs. Spec vs. Semi-Custom Homes
- Spec Homes are pre-designed and built for general sale. They’re usually the most affordable option.
- Custom Homes are fully designed from scratch and tend to be the most expensive. Custom homes can cost around $150 a foot and go up to around $ 500 a foot depending on upgrades.
- Semi-Custom Homes offer pre-designed floor plans with customizable finishes ideal for balancing design freedom and affordability.
If you want the highest-quality home builder (and this is not a guarantee) a semi-custom home builder will often give you as high a quality without as high of a cost of a fully custom home builder.
What If You Already Own Land?
If you’ve bought a plot already, you’re ahead of the curve. You can get a loan to build a house on my land which is a construction loan that only finances the construction. This route will generally come with relatively lower interest rates and faster approval (as long as the land is already paid for).
Final Thoughts
Constructing a home in Texas can make good sense as a long-term investment, as long as you consider several factors. When you know the average cost to build a home in Texas, you can plan your budget and ward off surprise expenses. The best projects start with a great idea, a well formed plan and a team that is ready for the challenge.
Whether you want to invest in land for sale in the Hill Country, customize a semi-custom model home floor plan, or discuss financing options with the best Texas construction loan lenders, this is your personal chance to make the dream of owning a custom home a reality. Just make sure you select the right builder, do not take the land too lightly and investigate possible loan products that may be a fit for you.