No, never. When you see what big builders pay for lumber vs what available to you; when you see what big builder pay for labor, when you see what they pay for materials, when you see what they pay for land, when you see what they pay for insurance, engineering, volume appliances, volume siding discounts, inspectors who choose not to examine every house - you will understand.

Unless you are like mushcreek do nearly all the labor yourself.

I agree. You cannot look at a built home, determine the square foot price and say a smaller, custom house is cheaper.

Plus if you're building in an area of 2500 square feet 4 BR 3bth homes, and you put in 1900 square foot 3 br, 2 bath home, if the time ever comes to sell, you'll most likely have a more difficult time selling

Even if you try to hire one of those same builders, assuming that's an option, you're unlikely to get a less expensive home, even in a smaller sq ft range. They usually have a limited portfolio of stock plans that they've fine tuned for maximum efficiency/minimum waste. Once you step into "custom," which can even be a simple footprint, you're likely to pay more per square foot.

From experience... We still went the custom route but found an actual custom builder once it was obvious that the production builders with "custom" in their business names weren't interested in helping us fit a home to our unique lot.

Size of home will depend on where you're looking too. Our town has a 1500 sq ft minimum for any home built, so they start out a good size and go up from there. Not unusual to find homes in our area of 6,000 sq ft. or more.

Also look at the age of the house. Older homes tend to be smaller. Go to areas like around the center of town and there are usually more older, smaller homes.

usually the neighborhood has a sq foot minimum - but my guess is that the houses they are putting up are well above that. Perhaps engage with the builders in the neighborhoods, and see if THEY have smaller plans that will still meet the minimums and can be less cost because you are still taking advantage of the economies of scale with the builders.

No, it will not be cheaper.

I suggest you start by clarifying your goals. Exactly what rooms do you want? What level of finishings (builder basic vs. a luxury build)? Once you're settled on just what you do want, then you can move forward with either building or buying.

You should also consider time and effort; building will require more of both, and if your only goal is to have a smaller house, I don't think it'd be worthwhile.

You might expand your search to other neighborhoods -- maybe some with not so new houses -- as a way of finding something less expensive.

Plus if you're building in an area of 2500 square feet 4 BR 3bth homes,
and you put in 1900 square foot 3 br, 2 bath home, if the time ever
comes to sell, you'll most likely have a more difficult time selling

Maybe, maybe not. John wants a smaller house in Neighborhood X. Someone else might as well, and it's good to be the smallest house in the nicest neighborhood ... or it might allow a less-qualified buyer to get into the neighborhood and add on later. On the other hand, often new neighborhoods have sf requirements, so a smaller house might not be an option.

Speaking only for myself, we had trouble with this too. We want a smaller house, and that "closed off" some neighborhoods for us.

You would think that in this day and age, what with 'green' initiatives and save the planet rhetoric that they would lift some of those size restrictions. We rejected a number of properties in our land search because of 2500 sq ft minimums. That would be 900 sq ft bigger than any house we've ever owned, and we're empty-nesters, nearing retirement. As it is, we wound up 30% bigger than our original 1000 sq ft plans.

While house size has been increasing for several decades, there is a rather large trend in size reduction now. Reason? Home ownership is at the lowest in history. Because young people can no longer afford the down payment necessary for conventional loans of houses costing $300K and up.

Nor can they afford monthly payments of $1,300 and up.

Comma Karma? Sorry. :-)

The advice that adding sq. footage is much less expensive when building versus adding on later is spot on. Major remodeling/renovation is usually more expensive than new builds because you have to pay for demo and more labor to redo.

Handy Mac I have a healthy income and I can't afford a monthly payment of $130,000.

Handy Mac I have a healthy income and I can't afford a monthly payment of $130,000.

Comma errors aside, I think people's opinions about "acceptable" house payments has changed. When my husband and I were first married and bought our first house, the standard advice to a new couple was, "Buy soon, buy as much as you can -- it will increase." Today that's not always true; we've reached the upper range, and people can't keep paying more, more, more for houses. Thus, we have interest in downsizing.

At the same time, the just-out-of-college generation (painting with a broad brush) isn't as interested in owning the big house in the suburbs -- along with all its upkeep. My younger co-workers are interested in townhouses (not as a short-term solution) and downtown-walk-to-shops-and-restaurants; they're willing to trade off large spaces. And, yes, PART of that is the lower price tag.

In 1978, the wife and I decided to buy a new house. We had a 100+ year old 'starter' home, original 1 bedroom with an added bedroom, and just had our second son.

I found a new house for $45,000(plus points on a VA loan), which put our house payment at $475 a month. The old house payment was $110 a month.

In looking, we found three realtors who said they would not even consider working for us for a house costing less than $120K(monthly payment would have been $1,200 or so, just under half of our net income). Eligibility was figured on gross income, not net.

I was told that was the way real estate worked, buy as much as possible, keep 7 years, sell buy bigger, and so on. Folks just gave up stuff and scrimped. I asked all three what we were supposed to give up, eating, cars, or kids.

No wonder the housing bust hit, values were artificial. I figured it would have happened sooner. House we have now was valued at one time at $220,000. Current sale value is about $130,000. It was a repossession and we got for a lot less than that current value. But, I've put the equivalent of about $25,000 in upgrades and improvements(not my costs since I did all the work).

When we bought our second FL house in 1993, we were qualified for about twice the house we actually bought. I'm glad I didn't listen!