Building a custom home is a very personal experience. You get to live in this balance of building the home of your dreams while also remaining within budget. Many people mistakenly believe that the question of "How much does it cost to build a custom home?" can be answered with a simple calculation based on square footage. However, this could not be further from the truth! We will discuss some of the factors that go into pricing a custom home, and how our ballpark pricing method can help you get an accurate estimate of what your dream home will really cost.

The Grocery Bag Model

The cost of building a custom home varies depending on many factors. Here's what we mean. Let's say you go to the grocery store and are told you get two grocery bags to fill to the brim. In one grocery bag, you want the bag to be as expensive as possible, while the other bag needs to be as inexpensive as possible. How would you go about filling those two bags? 

If you want something expensive you will most likely head to the butcher counter and fill the bag with the best cuts of Wagyu filet mignon and ribeye steaks. For the inexpensive bag, you'll head down the soup aisle and get four packs of ramen noodles for a dollar.

Two bags the same size with a cost differential potentially in the hundreds of dollars. Both bags have the same "square footage" but it is less about the space inside and far more about what you put inside. The same is true with building a custom home. While square footage certainly impacts the ultimate cost of the home, it doesn't tell the whole story.

Ballpark Pricing vs. Square Foot Pricing

It is for this reason Wausau Homes prefers to use a ballpark pricing method.

Our ballpark pricing method can help you figure out where your money is going and what type of custom home you can afford within your budget. Rather than a single price per square foot, a ballpark price range is provided for a house of a specific size and style.

This is a more precise method of pricing custom homes that enables you to assess areas to splurge and areas to save while designing your dream home. Would you want a few hundred extra square feet or genuine hardwood floors? Ballpark pricing helps you make all of these choices and get the house of your dreams within your budget.

Our process always starts with sitting down with you and discussing your specific wants and needs for your home. We then provide you with a price range that we believe your home will fall into based on your desires. This method is much more accurate than square foot pricing, as it takes into account the many factors that impact the cost of building a custom home. Before construction begins, you will receive a precise firm price at contract signing, once you have completely dialed in your new home design.

For a full explanation of our custom home pricing method check out our blog “Why We Use Ballpark Pricing vs. Square Foot Pricing”.

What Factors Impact The Final Home Cost?

There are many factors involved in estimating the cost of building a custom home, but it’s important that you understand what these factors may be and how they could impact your total home cost.


This is the first and most obvious factor. The price of land will vary depending on location. In addition, if your land needs to be cleared or graded, or if you have a difficult building site (i.e. steep slope, large trees, etc.), that can also add to the cost to prepare your lot for your new home build.


The design of your home will also impact the cost. A more complicated roofline, the size and type of foundation, and the number of bedrooms and bathrooms will add to the price. Think carefully about your home design, as these decisions could provide a better return on investment in the future if you decide to sell.

Quality Of Materials

The type of materials, fixtures, and finishes you select for your home will play a big role in the overall price. For example, using high-end finishes like granite countertops or custom cabinets will add to the cost. The same is true for fixtures such as plumbing or lighting. If you select higher quality materials that require more labor to install, that will also increase the price.

Square Footage

As stated before, while we don't use only square footage to price our homes, the size of your home will play a role in the final cost. Larger homes will most likely cost more than smaller homes. However, it's important to keep in mind that the design of your home has a bigger impact on the price per square foot than the actual square footage.

Supply And Demand

This is a factor that is out of your control, and lately, it has been largely out of the control of the entire construction industry over the last couple of years throughout the pandemic. That being said, this is incredibly important, especially these days. The cost of building a home can be impacted by the current market conditions. If there is a housing shortage, the cost of materials and labor will most likely increase. If there is a lumber shortage or windows are stuck in supply chain issues, you'll see the cost of your home go up.

For a more indepth look at these factors we recommend diving into our blog titled “5 Factors That Influence Home Cost”.

What you can afford with your budget?

As you can see, the question, "How much does it cost to build a custom home?" is as complicated as the question, "How much does it cost to make dinner for a family of five?" The answer is: It depends on what you put in your bag. Do you want macaroni and cheese or bone-in ribeye?

Building a custom home is a big investment, and it's important to make sure you understand what factors impact the total home cost BEFORE you start planning your project. It's a good idea to sit down and create a budget, so you have a realistic idea of what you can afford. With careful planning and execution, building your dream home can be attainable.

The best way to avoid any surprises is to work with a reputable builder who has successfully streamlined their process and weathered the storms of supply and demand. After 60 years and more than 200,000 homes, Wausau Homes is that builder.

If you have questions about our process or would like to get a ballpark price on the floor plan of your dreams, please contact your local independent Wausau Homes builder. They would be happy to walk you through the steps of building a custom home and help you figure out what home is best for you and your family.

Join our mailing list