Building a custom home vs. a home in a development
As a general rule, building a custom home that is tailored to your every need will be more expensive than buying a tract home from a builder. On average, building a tract home in North Carolina will cost $200-$300 per square foot, while building a custom home could be as much as 20% to 50% above that cost.
While building a custom home gives you more options, it will also require you to assemble a team of experts to design and build the home from start to finish. Here are the team members you will need and a breakdown of what they might cost you:
Architect (5% – 20% of the final build cost)
Hiring an architect will be integral to making your vision come to life when building your custom dream home. Before you start your search for the right architect, get clear about what you are looking for. Be sure to do your research and ask your network for recommendations for architects in your area who have experience designing the kind of home you are looking to build.
The cost of hiring an architect could make up anywhere between 5% and 20% of the final cost of the build. For a 2,100-square-foot home in North Carolina with a final build cost of $297,062 (the state average), you could expect to pay between $14,853 and $59,412. Some professionals will opt to charge by the hour or per square foot of the build for their services, but this is less common.
In North Carolina, the average cost of a residential architect is approximately 9.8% of the construction cost, so a $297,062 build would equate to a $29,112 architect’s fee.
General Contractor (10% – 20% of the final build cost)
A general contractor will oversee the entire process of building your custom home — they will also be responsible for hiring and paying subcontractors, vendors, and construction workers. General contractors typically charge what is called a “cost-plus” fee arrangement, which accounts for the cost of the labor and materials plus a negotiated fee for the general contractor. This usually comes out to 10% to 20% of the total build cost.
Additional costs of building a custom home in North Carolina
As previously mentioned, building a custom home usually comes with additional costs. Your real estate agent can help you determine more accurate costs — these figures are meant to give you a general idea.
Land survey ($376 – $768)
Land surveys, which identify your property lines and land features, range between $376 and $768.
Excavation and grading ($1,500 – $10,000)
If you’re buying a tract home, the land price will be rolled into the overall price to build a home. If you’re buying a lot on your own and then building a custom home, you must consider the cost of excavation and grading, which will vary depending on the size of your build and the amenities you want to add to your property.
General excavation for new construction typically costs between $1,500 and $10,000, but you may also want to consider the price breakdown for various aspects of your build.
- Basements: $5,000 for smaller homes, up to $15,000 for larger homes
- Patios or Driveways: $1,000 to $2,500
- In-Ground Swimming Pool: $400 to $1,500
- Land Clearing: $1,400 to $5,800
- Trenching for Piping: $1,500 to $10,000
Common styles of homes in North Carolina
From mountain log cabins to coastal beach homes, there are plenty of design choices when building a new home in North Carolina, especially if you are custom building.
However, if you are going with a tract home in a new development, your choices may be more limited by the builder’s offerings. Popular architectural styles for new construction developments in North Carolina include Coastal, Craftsman, Colonial, and Modern Farmhouse.
Within every architectural style, you’ll often find features designed for humid southern climates, including:
- Columns, supporting deep roof overhangs to protect from the heat in summer or snow in the mountain areas in winter
- Long and deep porches, wrapping around the sides of the home
- Massive trees, particularly oaks, which provide much-needed shade in the summer
- Breezeways
During North Carolina’s humid summers, these architectural features can provide some relief from the heat of the day. Homebuyers should be on the lookout for these characteristics when choosing a floor plan or collaborating with an architect.
According to Wohl, the ranch-style home is one of the rarest architectural styles you will see in new home construction in North Carolina.
“We generally do not see ranch-style homes in the newer developments, with the exception of the 55+ communities,” he says. “One of the reasons is because we have such a huge influx of new homebuyers, that most developers are building homes on less than an acre of land.”
Wohl notes that even townhomes are rarely just two stories anymore. Most of the builders have gone to three-story townhomes to maximize the square footage on a smaller land footprint.
While it may be easier to construct a single-story ranch home, the larger foundation and more expansive roof may make a ranch home more expensive to construct.
Although the single-story ranch is less common, Wohl says he does see the raised ranch style quite often. “Because lots are so much smaller, you could consider a raised ranch-style home, which gives you the ranch-style look but affords you the greater square footage of a two-story home.”
More affordable options for building a home in North Carolina
While going with a bare-bones building strategy can get you into a new construction home for less, cheaper isn’t always better. Shoddy build quality will inevitably lead to problems down the road — anything from a leaky roof to poor sound insulation can be a frustrating discovery when you’ve only been in your new home for a few months — and there’s value in creating a home you genuinely want, not just one you’re settling for.
Alternative home-building options can give you more for your money and offer valuable flexibility during the construction process.
Tiny homes ($30,000 – $60,000)
A tiny house is usually 600 square feet or less in size. They’re not ideal for large families, but building a tiny house can be faster and more affordable than a conventional home if a smaller space fits with your lifestyle. On average, tiny homes cost between $30,000 and $60,000 to build.
Tiny houses are growing in popularity in North Carolina, especially in the mountain towns, where tiny home communities are springing up. They can also be a great option as a starter home — especially since prices have been rising in North Carolina.
One of the growing attractions of these communities is the added amenities, the costs of which are shared by the homeowners. At The Village in Flat Rock, North Carolina, where tiny homes are priced from $140,000, residents can benefit from a clubhouse, community pools, a fitness facility, a dog park, and much more.
If you want to build on your own or work with an accredited builder, the Acony Bell tiny home community may be right for you. Located in the Blue Ridge Mountains, the community offers one-year land leases with water and electric hookups. When embarking on a tiny home build, it’s important to do your research, as North Carolina has its own specific regulations concerning size and construction.
Modular and prefabricated homes ($44 per square foot)
A modular home is built in a quality-controlled factory in sections and then transported and assembled on the home site.
According to ModularHomes, at a per-square-foot price of $44, you could build a new modular home in North Carolina for as low as $80,000, depending on where you choose to live.
Modular and prefabricated homes in North Carolina tend to be more budget-friendly because there’s reduced material waste, the homes are quicker to construct (cutting down on labor costs), and they’re built in factory settings that offer greater control and efficiency.
While the price of a modular home in North Carolina is less expensive than a tract home or custom build, the prices will vary depending on the style and square footage.
Because the science of modular building has gotten more sophisticated through the years, there is a surprising range of housing types and styles to choose from. This is true with manufactured housing as well, which is estimated to be over 318,000 units in North Carolina.
Existing home vs. cost to build a house in North Carolina
In most states, buying an existing home is cheaper than building a home. In North Carolina, however, a 2,100-square-foot spec costs roughly $297,062, while the median sale price (as of December 2024) of an existing home amounts to $327,482. That’s a price difference of $30,420, making new construction an enticing opportunity.
Building a home almost always comes with a higher price tag upfront, but there are some long-term savings that new construction homeowners enjoy:
- Energy efficiency: Newly constructed homes are generally more energy efficient than older homes — homes built after 2000 use 21% less energy than older homes on average, according to the U.S. Energy Information Administration. This is partially due to stricter energy regulations as well as better insulation and windows in new homes.
- New home warranties: New construction homes are often covered under builder warranties for a specified period. When purchasing an older home, most of the key systems, such as the HVAC, roof, and plumbing, will be older and no longer covered under any kind of warranty.
- Fewer maintenance costs in the first few years: With a newer home, you can count on your HVAC, plumbing, electrical system, and more to be functioning properly with little required maintenance in your first few years of homeownership. Older homes will likely have older roofs and older systems, requiring you to pay for replacements much sooner.
- New homes might be cheaper to insure: Many homeowners insurance providers offer discounts for new construction homes due to the lessened risk of damages common in aging homes.
“New construction will always win over an old home,” Wohl says. “Homebuyers like to design their kitchens, especially, and choose a floor plan that fits their needs. And the biggest advantage of building a new home is that it is maintenance-free.”
