How Much House Can You Afford to Build?
How much house you can afford to build comes down to four things: what you have to spend, what your land and site will require, what you want the home to look like, and how big it needs to be. Work through those four things and the answer becomes clear.
Summit walks through all of it with you at your first consultation so the vertical build price range you are planning around is accurate before any contract is made.
STEP 1: ESTABLISH YOUR TOTAL AVAILABLE BUDGET
Your total available budget is the combination of cash you can commit to the project (savings, proceeds from a current home sale, or other equity) plus the construction financing you can qualify for.
Construction loans in Southern Utah typically require 10 to 20% of the complete construction contract as a down payment, a good credit profile, and the ability to service the debt. If you already own the land, its equity is generally accepted as the down payment.
Work with a lender to establish an accurate financing limit before your design is set. Summit can connect you with lenders experienced in construction loans in the Southern Utah market.
STEP 2: SUBTRACT THE VARIABLE CONSTRUCTION COSTS
From your total available budget, set aside the variable construction costs specific to your project:
Land, if it has not yet been purchased, comes first.
Where a municipal water source is not available, a culinary water well comes next.
Over-excavation, if your soil conditions require it, can significantly add to your complete construction contract and is one of the most important costs to identify early.
Extensive landscaping and furnishings are also worth planning for.
What remains after accounting for those is your available budget for the vertical build, which is the number that determines the size and finish level of the home you can build.
STEP 3: CALCULATE THE SUPPORTED SQUARE FOOTAGE
Divide your remaining available budget by Summit's vertical build price (price per square foot) for the home type you are considering:
For an entry-level build at $180 to $250/sq ft, a $400,000 vertical build budget supports approximately 1,600 to 2,200 square feet.
For a semi-custom build at $200 to $300/sq ft, a $600,000 vertical build budget supports approximately 2,000 to 3,000 square feet.
For a fully custom or luxury build at $250 to $400+/sq ft, an $800,000 vertical build budget supports approximately 2,000 to 3,200 square feet.
STEP 4: CALIBRATE AGAINST YOUR LIFESTYLE REQUIREMENTS
Compare the supported square footage against what your household actually needs — not just how you live today, but how you plan to live in the years ahead.
Aging in place, a growing or changing household, working from home, multigenerational living, and accessibility needs all affect how much space you need and what kind of layout works best for your lifestyle.
If your budget does not support the home size you need, you have options: prioritize must-have features over nice-to-have ones, choose a lower finish level, consider a parcel with lower site costs to free up more budget for the build itself, or increase your total available budget.
Summit works through all of this with you at your first consultation so your vision and your budget are aligned before design begins.
Get Your Questions Answered
In a free 45-minute consultation you will walk away with a realistic budget range, an estimated timeline from planning through move-in, and a clear recommended next step forward.
No obligation. No pressure. Just clarity.
“The clients who take the time to establish what they have to spend, account for land and site costs, and align their finish level with their budget are the ones who come out on the other side with a home they are financially able to complete and enjoy.”
— Benjamin Barlow, Owner
Summit Building Construction
25+ Years Building in Southern Utah
PEOPLE ALSO ASK
How do I calculate how much I can spend on a custom home?
Start with your total available budget.
Set aside the variable construction costs specific to your project: land if not yet purchased, a culinary water well where required, over-excavation if needed, extensive landscaping, and furnishings.
Divide what remains by Summit's vertical build price per square foot for the home type you are considering.
The result is the rough square footage your budget supports, at your chosen finish level.
What income do you need to build an $800,000 home?
Qualifying income depends on the down payment, the current interest rate, and the lender's criteria.
As a general guideline, lenders typically look for a housing expense-to-income ratio of 28% or less, though this varies by lender and loan type.
The best way to get an accurate qualification range is to speak directly with a construction lender.
Summit can connect you with lenders experienced in Southern Utah construction loans who can give you a precise assessment based on your full financial profile.
Can I build a custom home for under $600,000 total project cost?
Yes, in the right circumstances.
An entry-level or semi-custom home on a Cedar City lot with city utility hookups already available, modest landscaping, and standard finishes can fall within that range at Summit's current pricing.
Rural parcels that require a well and/or significant over-excavation will add to the complete construction contract and make that threshold harder to achieve for the same size home.
The best way to know what is achievable for your specific situation is to bring your questions to Summit's first consultation.
Trusted custom home builder serving homeowners for over 25 years
