Should I Build or Buy a House?

Building a House vs. Buying a Home: What is the Best Value For You?

June 23, 2022
Julie SchmidtBy Julie Schmidt
V.P. of Mortgage Lending

Your home is one of the most important parts of your life. Whether you’re a first-time homebuyer or looking to upgrade your current house, when you begin considering what’s right for you and your family, one of the questions you'll ultimately end up asking is: Should we buy or build?

There are a number of key factors you’ll want to consider as you weigh your options. As of 2022, the typical home value in the U.S. is roughly $350,000; meanwhile the typical cost to build a house is around $200/square foot. If you choose to build, you have complete control. Meanwhile if you choose to buy, you can typically move in sooner.

Below, we go into further detail to help you jumpstart the consideration process and connect you with some helpful resources along the way.

Build or Buy a House: Weighing the Factors

  Buying a Home

Building a House


(national median home value)

$200 per square foot**

More Room for Negotiation?

Yes  No
Energy Efficiency Lower Higher


Move in as soon as you close. Can take months to complete.  
 Customization Minimal

You have complete control.

Immediate Repairs Needed?

Possibly No (or covered by warranty)
Competition  You'll likely face competing bids. No competition.

**Source: HomeAdvisor

Good Reasons to build a home:

1. Customization

When you build a home, it's yours! That means you get final say over the design and construction, including all the features you've always wanted in a new home. Do you want an open floor plan? Two sinks in the bathroom? Extra space in the garage? Have it your way.

2. Energy efficiency

A new home means new appliances, better insulation and other energy-efficient benefits that could lower your monthly utility bills. In fact, according to the U.S. Energy Information Administration (EIA), the average annual energy use per home has declined despite the fact that we use more air conditioning, appliances and consumer electronics than ever before.

3. No competition

According to the National Association of Realtors (NAR), the average home is on the market for just a little more than one month before being sold. That shorter time frame means you're more likely to face competing bids. But when you build your own home, you don't have to worry about that competition.

4. Less maintenance

With a new home you'll avoid the usual wear and tear that comes an existing house. You won’t have to worry about scheduling repairs to fix issues found during a home inspection, and you likely won't need to budget for renovations (for a few years at least). 

5. Warranties

If any repairs do pop up, your new home should come with a builder's warranty that should cover any repairs during the first year (and sometimes up to 10 years, depending on the plan you purchase). That will give you some peace of mind when you buy an existing home.

Note, if you are planning to build ...

Did you know that if you build a home, most banks will actually make you purchase two different mortgage loans — one for the building portion of the project, and another for the permanent financing? At Security National Bank, we've combined these into a single-close construction loan, to save you time and money. Visit to learn more.

Advantages to buying a home:

1. Typically lower, less variable cost

The cost of building an average 2,200-square foot home, at $200 per square foot, amounts to around $440,000. Meanwhile, real estate website shows the median home value of a single-family house hovers around the $350,000. It's important to note this isn't a completely direct comparison. There are a lot of factors that go into the pricing of homes — including size, location, lot costs and local contractor costs, just to name a few.

One thing is for certain — the sticker price on home you buy is more stable. Meanwhile, there are a lot more factors that could increase the cost of a home building project, between the time you break ground and move-in day.

2. Takes less time

Building from scratch can take months to complete. Buying and closing on an existing home can take far less time and you’re able to move in as soon as you’ve closed on the house.

3. Convenience

When building a new home, you have to consider every detail, including where to purchase land, the design of the home, and all of the fixtures and trims you want included. These decisions are already made when buying an existing home, which can make it a less stressful process.

4. More room for negotiation

A real estate agent can help negotiate the price of an existing home so you get the best deal possible. There is less room for negotiation when dealing with contractors on the build of a new home.

5. Make upgrades over time

While an existing home may not have every feature you want, you can take time to make upgrades as they become necessary and as you are able to save for them.

The process of buying a home has a lot of steps and details — but we’ve got your back! Our mortgage team is here to help you get started so that you have all the information you need to make well-informed choices for your home purchase.

Resource for you

Take our free, interactive crash course on Buying a Home to calculate costs, learn more about the home-buying process, ask our mortgage experts a question and much more. 

About the Author

Julie Schmidt

Julie Schmidt is the Vice President of Mortgage Services at Security National Bank. A licensed mortgage loan originator, Schmidt has received the President's Club or Winner's Circle designation by the Iowa Mortgage Association every year since 2004 for her outstanding performance and customer service in the field.