Published: Aug 14, 2019 | Updated: Jan 27, 2022

Do Custom Homes Cost More Than Prebuilt Homes?

Custom and prebuilt homes each have their pros and cons. Which type of house is best for you and your family in this particular season of your life?

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The short answer to this question is usually, yes. Custom homes tend to cost a bit more than comparable prebuilt homes. In this post, we’ll cover the differences in price per square foot and some of the reasons behind the differences, as well.

Each type of home has advantages and disadvantages. The key is to discover which type of house is best for you and your family in this particular season of your life.

Prebuilt homes

Prebuilt homes (also known as prefab or prefabricated homes) include modular and manufactured homes. Manufactured homes are built entirely in a factory and then shipped by truck to the site (as single, double, and triple wides). Modular homes are built in pieces in a factory and then assembled on site. They may be built as rooms, sections of a house, or as walls that are later put together. 

Advantages of prebuilt homes

If you plan to build a home, prebuilt homes have some positives:

  • Lower cost per square foot.
  • Shorter wait time to move in.
  • Modular homes have some customization potential.

Construction costs for prebuilt homes are often lower than other new home options. You save money in labor when a product is built on an assembly line. You also save money because the builder buys materials in bulk and they can usually re-use any wasted material on another project. 

The average cost for a prebuilt home is about $76 per square foot, not including the cost of the lot, according to the National Association of Home Builders. Of course, there is a wide range of price and quality from about $50 per square foot for some manufactured homes up to well over $200 per square foot for some luxury modular construction. On average, these homes cost 10-20% less than a comparable custom home.

Disadvantages of prebuilt homes

Prebuilt homes are not for everyone. Some disadvantages include:

  • A more complicated financing process involving both a home construction loan and then a mortgage. 
  • Manufactured homes may depreciate over time.
  • Negative public perception may impact resale value even on modular homes.
  • Be sure to include additional costs in to the price (lot, utility hook-ups, land preparation, septic system, etc…).
  • Serious limitations with customization, floor plans, and square feet for manufactured homes.
  • Zoning limitations for prebuilt homes due to covenant restrictions in some municipalities and communities.
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Custom homes

If you plan to build a home, custom built homes are a great option. Just like with a personally tailored suit, you do pay a bit more to have a home tailored just for you and your family but you also get what you want in the end. Of course, a site-built custom home has disadvantages and advantages, like any other home.

Disadvantages of custom homes

Custom homes are not for everyone. There are some possible disadvantages:

  • Longer build time.
  • Many decisions to make.
  • Higher cost per square foot upfront.

Custom home cost runs (on average) between $100-$400 per square foot, not including the cost of the lot, according to Home Advisor. Your builder can give you a much more accurate cost estimate for your particular project. And you have control over your budget and which materials you choose to use. A custom home doesn't have to be extremely expensive.

With a custom home, your builder builds one house at a time, in many cases. The builder orders materials specifically for your project. Everything centers around you, the home buyer.

Advantages of custom homes

For some people, building a custom home is ideal. Here are a few of the advantages—you:

  • Get exactly what you want.
  • May end up with lower costs in the long term if you don’t need to renovate the house later (or sell and buy something more expensive) to be what you really needed.
  • Potentially save future expenses by being able to put off moving to assisted living awhile longer if you use universal design.
  • Build where you want to.
  • Have total control over the materials and quality.
  • Design your own custom landscaping.
  • Choose custom appliances and features.
  • Go green if you would like to and enjoy significant future energy savings.
  • Have freedom to use any style of architecture and design.
  • Take personal pride and the sentimentality of living in the house you helped create especially for your family.

For those who desire to build a new home, there are options that best suit each individual’s needs. Be sure to do your research ahead of time and that you are comparing the immediate and long term costs so that you won’t have any surprises down the road.

Whatever you decide, we hope you will find the house that is just the right fit for your family at this stage in your life.

Ready for a custom home builder in the Lexington, SC area?

Please contact us today!

We are a family-owned custom builder with new construction in areas like:

Lake Carolina, Lexington, Blythewood, Chapin, Irmo, Forest Acres, downtown Columbia, West Columbia, Pine Ridge, Ballentine, the Lake Murray area, and more.


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