Why Does Building a Home Cost So Much?

Building a home from the ground up is an incredible expense. Yet, somehow the prices have only gone up in the past few years. 

A lot of time, effort, and materials go into creating a home for you and your family. The number of materials you need for the structure alone, like concrete and lumber, are already pricey but added to the custom design and layout you choose to go with adds up to a massive expense.

There is a lot to consider and even more steps than we realize, so let’s look at all the facts to understand why building a home is so expensive. 

The Facts

The truth is that the price of building a single-family home has increased dramatically over the years for multiple reasons, the biggest being the COVID-19 pandemic. 

The average cost to build a home in Oregon is $287,500.

Construction builds the foundation of your home, so the fact that construction costs went up 17.5 percent from 2020 to 2021 explains why building homes did too. Not to mention 2021 costs of building were 23 percent higher than they were in 2019.

Construction prices increased like most items during the pandemic and for similar reasons. Delayed packages, a lack of workers, and inflation, in general, are to blame for the high prices that remain today. 

Construction is only one of the factors required for a house. Materials, inspections, permits, labor costs, and architectural drawings are just the beginning of the cost you have to pay, and they, too, have increased since the first COVID outbreak.

Here are the material price changes from 2020 to 2021 that still linger today:

  • Insulation materials went up 17.3 percent.
  • Cement went up 7.4 percent.
  • Steel mill products went up 137.4 percent.

Supply chains affect building material costs due to the pandemic due to the short supply of lumber, concrete, steel, and other materials. This doesn’t even touch upon the materials needed for siding, plumbing, electrical, and other additional aspects of home building.

Labor costs changed drastically since the pandemic due to the fluctuation in employment and unemployment rates. Employment dropped during the pandemic, causing inflation to increase, including the labor price. 

There are myriad factors to consider when building a home. To build a house, you need to have a permit, which alone can cost up to two thousand dollars

You also have to consider home inspection costs, which tend to be five dollars per square foot, which can add up. Down payments are also worth considering since you’ll need that money ready and upfront before construction goes underway. 

As a side note, when you’re factoring in all the costs and if you’re borrowing money from the bank, don’t forget to check your mortgage rate.

The facts are that a home is expensive to build and is even more so after the pandemic. But the sale price of existing homes is also going through the roof. So, those who want to buy a house instead are not in a better position. 

After discussing housing costs and housing prices, let’s now focus on the pros and cons of building a house. 

Pros and Cons

There are positive and negative aspects to building your home. It ultimately comes down to your priorities and what you want in your future home.


  • From the layout and architecture to paint color and wall texture, your home will look exactly how you want it to. You get to design a home.
  • One big investment leads to loads of savings in the future. Owning a home may mean home-owners insurance payments, but you save yourself all the money you’d spend by renting a home. Plus, you have a forever place to stay and even pass it down to your children.
  • You’re in complete control of this project, so whatever you say goes. 


  • Building a home is a hefty investment that not everyone can afford. It’s partially a risk, so you must have a plan and know what you’re doing.
  • It takes time to build a home and relies on many outside factors. An example would be, if there’s a lack of staff, you have to wait months to see your investment become your home.
  • Prices have gone up since the pandemic and inflation, so building a home is even more expensive than it was four years ago.

Building a Home Starts with Finding the Right Builder

Although building a home is expensive and the average cost has been going up, who you work with to accomplish your goals is the most crucial decision. You need someone reliable and trustworthy because, as was previously stated, you will be working with them for a long time. 

New Era Homes is capable of handling all of its customer’s needs. Building your home and having your own space designed by you is one of the greatest feelings in the world. 

The price of building a home is worth all of the benefits that come with it. Many people can only dream of owning their home, let alone building it from the ground up.

If you’re looking to be one of those lucky people who get to build their dream home, request more information from New Era Homes to start the process.