Is it cheaper to build on your own land than to buy a newly built house?
Published
Summary
The national figures can't settle it, and the two numbers that are easiest to find aren't measuring the same thing. The median new single-family home sold in 2025 went for $417,400, land included. The median contract price for a house built on the owner's own land was $404,000, and that figure leaves the land out, along with change orders and any work around the house done by other contractors.
The two medians side by side
| Median | Land included? | Also left out | |
|---|---|---|---|
| New single-family home sold in 2025 | $417,400 | Yes | extras or options the buyer paid for in cash |
| Contractor-built home started in 2025 | $404,000 | No | change orders, grounds work by a different contractor, work planned after completion |
The groups differ too. The sales figure covers 678,000 homes sold in 2025, with a median size of 2,194 square feet. The contract figure covers about 131,000 contractor-built homes started that year. Census sales statistics leave out houses built by a contractor on the owner's land, so the two sets don't overlap.
The Census average sales price, $523,800, sits well above the median, which is one more reason to be careful about which number a comparison started from.
What a builder's sale price pays for
NAHB's 2024 survey breaks down the average sale price of $665,298 for homes builders built on their own land and sold. Construction took 64.4%. The finished lot, including financing, took 13.7%. Overhead and general expenses were 5.7%, sales commissions 2.8%, financing 1.5% and marketing 0.8%, which left 11.0% as pre-tax profit. That profit share is above the long-run average of 9.8% the survey has recorded since 1998.
Building on your own land takes the lot line off the builder's invoice and puts it on yours. Which of the other lines turn up in a contractor's price depends on how that contract is written.