Building a Home of Your Own Building a Home of Your Own

March 1, 2000

When Henry David Thoreau built his cabin on the shores of Walden Pond in Concord, Massachusetts, in 1845, he paid only $28.12½ for it. Relatively inexpensive even in its own day, Thoreau devotes a considerable portion of the first chapter of his book Walden, entitled "Economy,” to describing how he saved money by doing most of the work himself. Nonetheless, even 150 years ago, this was an unusual undertaking. Thoreau laments, "I never in all my walks came across a man engaged in so simple and natural an occupation as building his house.”

Some things never change.

Today, the average new house costs almost $200,000 (in the Northeast, it's closer to $250,000), and its construction is nearly always left to specialists. From pouring the foundation to nailing the roof, building a home requires about thirty separate operations that most owners are happy to leave to a general contractor, who in turn usually farms them out to subcontractors who specialize in carpentry, masonry, waterproofing, plumbing, electricity, flooring, roofing, and painting. Modern home construction is a formidable and complex undertaking that is avoided by most.

Yet, there are some hardy souls who nonetheless persevere and build their own homes. According to the most recent U.S. housing census, of the 1.3 million single-family homes constructed in 1999, 144,000 of them - 11 percent - were "owner-built.” The census defines a house as "owner-built” if the owner serves as the general contractor; presumably, the number of owners who take it one step further and actually do the construction work themselves is much smaller.

What would motivate anyone to take on such a formidable task? For some, it is the enticement of saving money. Although opinions vary, some have claimed not only that it is possible for a nonspecialist to build a home, but that he or she can also save money in the process. The Shelter Institute, a home-building school located in Bath, Maine, estimates that a self-builder can save 25 to 50 percent on custom home construction. Books with titles such as Save $50,000 on Your New Home Yes, You Can Be Your Own General Contractor offer readers advice on how to manage the project themselves, so that they can save the 10 to 20 percent fee normally charged by a general contractor.

As anyone who has ever built his or her own home will tell you, however, such savings can be difficult to realize. For one thing, a first-timer will inevitably take longer and make more costly mistakes than a professional. For another, the foregone earnings of taking time away from work must be factored in. And even so, the hardship and frustration of taking on such a large project can swamp the promise of financial benefit. Such challenges notwithstanding, many are motivated by something more powerful than money the pride of doing it themselves and the prospect of getting exactly the house that they want. Thrown in, perhaps, is a little of the Yankee spirit that motivated Thoreau, when he set out to conduct an experiment in self-reliance, to see how much of the business of life one could conduct for oneself.


One of the first obstacles to building a home is finding a piece of land. In many areas, especially cities and long-settled suburbs, vacant lots can be virtually nonexistent. Over the years, a whole market has emerged of professional speculators who search for buildable lots. In the hot real estate market of the 1990s, it became hard even for contractors to find empty land.

One alternative, especially in affluent areas, is "teardowns.” Here, builders identify a home where the price of the lot has outstripped the house that is on it. They then buy the home, tear it down, and build a new - and presumably more expensive - house on the lot. Given that land can account for 20 to 50 percent of the price of even a new house - according to Karl Case, economist at Wellesley College and visiting scholar at the Boston Fed - one can see how the ever-appreciating price of land, and the eventual depreciation of a structure, would justify this strategy. Still, the builder bears the direct cost of having to pay for a house just to tear it down. And, there is the potential resentment that local residents may have to such a dramatic change in their neighborhood.

Another challenge facing self-builders is obtaining a construction loan. Many lenders are skeptical of lending money to people without experience. "I wouldn't want to be the lender for a self-builder to get his construction experience from,” says Bill Porter, Senior Vice President of Walden Mortgages in Concord, Massachusetts. There is also the problem of collateral. Unless a builder already owns the lot outright, it can be difficult to show a lender what he or she would get if the project fails. "We are in the lending business, not the construction business,” explains Porter. "We don't want to finish your half-built home.”

Still, it is not impossible for a self-builder to obtain a construction loan. David Hamilton, who served as general contractor for his own home construction project in Marblehead, Massachusetts, found that the opportunity is there if the self-builder can show that he or she is serious. "You can't come in with a drawing on the back of an envelope,” says Hamilton. "They are looking for a business-like attitude and want to know that you're creditworthy. If you can show that you're serious about this - that you've really thought about what it will take - it can be a good investment for them.”

Still, the self-builder may need to shop for a mortgage originator and be prepared to pay a higher interest rate when one is found. This may help to explain why one in five self-built homes are financed by cash, compared with only 7 percent of all single-family homes.


In the popular 1948 movie, Mr. Blandings Builds His Dream House, the architect chides Cary Grant and Myrna Loy for envisioning a home that has "a second floor twice as big as the first floor and a chimney coming up in the center of the master bedroom, leaving a room in something of the shape of a square doughnut.” In reality, according to Marcus Gleysteen, an architect with Gleysteen Design of Cambridge, Massachusetts, a far more common outcome is that the self-built home is ordinary "Why would you want to go to all of the trouble to self-build unless you could get something different than what was available on the regular market?”

Yet there are many potential pitfalls in self-design. One of the most common is inadequate specifications for fixtures and materials, leading to underbids by subcontractors or lower quality. On the other hand, it is not unusual for the Do-It-Yourselfer to overbuild - making things too big or too strong - costing extra. Although inspectors presumably would keep you from building a home that was actually unsafe to occupy, mistakes can be expensive if they aren't caught until construction begins. And, if the owner settles on a quirky design, it can be a tough sell on the resale market. This is why so many self-builders who want a custom home choose an architect, despite the typical 8 to 15 percent fee. "It was the best money I spent,” recounts David Hamilton. "It's hard enough to build; you need a good plan to guide you through.”

But for owners who want to design their own house, there is a vast array of books to offer assistance. For a more high-tech approach, some Internet sites offer software that helps the novice draw his or her own blueprints. One of these, "Chief Architect,” even uses three-dimensional graphics to show the user what the house will look like as one walks through it, although all such plans ultimately must be vetted by a building inspector or a structural engineer in order to get a building permit.

Others are content to choose a house plan from one of the many "plan books” that provide thousands of blueprints to choose from, complete with materials lists and specifications. Still others take it one step further and purchase a home "kit” consisting of precut lumber that is then assembled by the owner. These range in design from a Cape to a log cabin and tend to emphasize those plans that are simple enough to be erected by an inexperienced builder. Although this can save money, it may leave the owner with a house that feels less than "custom.”


In The Wealth of Nations, Adam Smith reflects on the marvelous efficiencies that result from specialization and the division of labor. With all the detailed knowledge needed to build a chimney, erect a wall, or even lay a carpet, an owner might wonder how he or she can be involved in the building process. Upon learning of the role of general contractor, an owner might exclaim, "There's something I can do!” As the general manager of the construction project, a contractor doesn't have to swing a hammer or even be at the job site all day; the actual construction of a house is usually left to subcontractors, who are experts in their respective tasks. The general contractor"s job is to coordinate their efforts and oversee the entire project. This, however, is not an easy job, for it demands not only a good understanding of how a house is built, but also the experience, contacts, and people skills needed to manage those who will build it.

One of the most challenging tasks for a general contractor is to find good people and make sure that they show up. This can be particularly tough for the one-shot builder, especially in a hot construction market, when the best subcontractors can get plenty of work from general contractors who will feed them regular business. And, even if the self-builder is lucky enough to attract skilled workers, they may charge more for their labor than they would for someone who uses them repeatedly.

The biggest problem in handling subcontractors, though, is coordinating their efforts once they are hired. The general contractor is like the conductor of an orchestra, and every note has to be played at just the right time. If one subcontractor doesn't show up, it can hold up the whole production. And not showing up is rampant; stories of painters who bring the ladder and then disappear for two weeks are almost commonplace. The reason for this is that subcontractors tend to overbook. Since they might be held up at any point on any job, most subcontractors have multiple possible jobs on any given day so that they won't remain idle. And because they can't be in two places at once, some jobs inevitably get delayed, which, in turn, causes delays for other subcontractors down the line. Even experienced builders complain that this is the plague of the industry. But for self-builders, the problem is worse since they do not have an ongoing relationship to use as leverage. The upshot is that it can take several times as long for an owner to build as it would for a professional. And, since the interest on a construction loan continues to accrue during any delays, the costs can quickly mount. Says Bill Picardi, a general contractor in Southborough, Massachusetts, "In this market, it's suicide to self-build.”

There is also the difficulty of knowing whether you are getting quality work. While few contractors are out to cheat the novice, they do work in a competitive business, where money is saved by doing things the fastest way. The challenge for the nonspecialist is to recognize when something has been done according to "standard methods,” especially when so many self-builders say that their whole reason for taking on the project is to uphold standards of quality and to get exactly what they want.

But, despite such challenges, it is nonetheless possible for an owner to act as his or her own general contractor and even to enjoy it. With no previous construction experience, David Hamilton worked as the general contractor for the home that he and his wife, Andrea, built in Marblehead, Massachusetts, and completed the work in just six months. Although he figures that it took $600 a month on his cell phone and every free waking moment outside of his work as a senior vice president for computer information systems to accomplish it, he avoided several of the potential pitfalls of self-building through advance planning. Hamilton began by spending the previous year canvassing the opinions of as many experts as he could and then comparison shopping for all his materials. He also hired the highest quality - not necessarily the cheapest - subcontractors, and then solicited their advice during construction. As a result, he got exactly the home that he wanted and estimates that he saved $75,000 in the process. "But,” Hamilton notes, "you have to have the right personality type to enjoy this. You have to be willing to call a subcontractor first thing in the morning and say, ‘You're not here and I'm not happy." Otherwise, things just won't get done.”


For those who choose to build a house with their own hands, the challenge is twofold the aspiring builder must not only understand how a house is built, but also become adept at the techniques of home construction. Fortunately, there are some resources to help. Some step-by-step construction manuals provide enough detail - at least in principle - to build a complete custom home from scratch. One of the first, Dwelling House Construction, was written by Albert Dietz in 1946, just in time for American soldiers returning home from World War II to have a handy, single volume to guide them as the nation underwent a house-building boom. One of the more recent, Do-It-Yourself Housebuilding, by George Nash, has been cited by many self-builders as their main resource. But, as anyone who has ever tried to build a house based solely on book learning will tell you, it is a formidable task.

For those who desire more individual instruction, the Shelter Institute offers intensive one- to three-week classes on all aspects of house construction. In business since 1974, the Shelter Institute has taught 25,000 students who have gone on to build 8,000 homes. "A lot of people come here thinking that there's some magic thing they have to learn to know how to build a house,” reported Patsy Hennin, the Institute's co-founder, in a recent interview with Down East magazine, "but there aren't any secrets. Perseverance is the biggest thing. Gadgets aren't the answer. It's not about how to use a hammer; it's about how to use your head.”

It also takes a lot of time and commitment. Unlike working as a general contractor, which can theoretically be done on top of a regular full-time job, building a home with one's own labor typically consumes anywhere from nine months (which is very fast) to several years of an owner's time. Few professionals could afford to take this much time away from their regular jobs and, if they did, they would probably find that the money saved on construction was eaten up by lost wages. Teachers, and others who have free time in the summer, are probably more able to make this type of commitment. And, as Patsy Hennin recounts, an even more practical method - though one that still represents foregone earnings - is to build a house in partnership, with one person retaining a full-time outside job and the other devoting his or her full efforts to building the house.

Doug Chin and Wanda Rice are a married couple who took the Shelter Institute course and built their own home in Haverhill, Massachusetts, in eighteen months, beginning in the fall of 1996. After completing instruction, Doug, who kept his full-time job throughout the project, said, "I feel confident.” Wanda, who would be responsible for almost all the actual construction, said, "What have I gotten myself into?” Still, after previous work experience in wholesale lumber, she knew that she could do it.

The bulk of the construction was done by Wanda. She ran the carpentry crew for the exterior work, did all the interior framing, laid most of the hardwood floors, and did a large portion of the finish carpentry. She drew the line at sheetrocking, though, "a nasty job” that few would choose to do themselves. Doug, an electrical engineer, did most of the electrical work, since Massachusetts allows unlicensed self-builders to do so subject, of course, to inspection. (Ironically, the state does not allow self-builders to do their own plumbing.) Today, Doug and Wanda live in the beautiful 3300-square-foot post-and- beam frame house that they built from scratch. "We love it,” says Wanda. "We got just what we wanted.”

Did they save money? "I'm afraid to add it up!” says Wanda. Despite the contribution of one's own labor, it can be expensive to self-build. And there can be trying moments as well, like when they tried to measure their progress against a housing development that was going up across the street, which put up four houses in the time it took them to build just one. "Doing this much work yourself is a real luxury. Most people couldn"t afford the time.” Indeed, any money saved in owner-built homes is probably not due to "free” labor. Instead, the largest cost savings are probably made through saving the general contractor's fee and, if one is lucky, getting the contractor's discount on building materials. Both Chin and Rice admit that, if they saved money, this is probably where it happened. Still, their real motivation for self-building is fulfilled by living in a home that they truly feel a part of. Would they do it again? "Not to that level,” Wanda says seriously. "But,” she smiles, "the pain subsides as time goes on.”


After World War II, when the nation was facing a severe shortage of affordable housing, the federal government published a book to encourage the poor to build their own homes, using inexpensive construction methods, including the conversion of wooden water towers and houses made of sod. Today, however, opinions vary on whether any sort of self-building is a realistic option for the poor.

For one thing, even economical construction methods do not save on the cost of land. In rural areas, where land is cheaper, self-building may be more feasible; indeed, the 1999 housing census shows over three times as many self-built homes (as a percentage of new construction) outside metropolitan areas as within them. In urban centers or prosperous suburbs, self-building probably isn't an option. Penny Faul, of HDR Builders in Concord, Massachusetts, sums up the point "The only person who could afford to build their own home these days is someone who could afford to buy one.”

Even for those who can afford it, self-building becomes particularly difficult in a hot economy. Steven Berman, of the U.S. Census, explains that "self-built homes are a countercyclical phenomenon.” They increase when the economy is doing poorly, as the speculative real estate market dries up and, presumably, subcontractors have less work. Indeed, 1999's 11 percent figure for owner-built homes is the lowest in two decades, down from a high of 20 percent in the early 1980s. According to contractor Bill Picardi, the tight housing markets that normally accompany an expanding economy make it much harder for self-builders. With a steady rise in residential construction over the last ten years, a recent boom in nonresidential construction, and an extremely low unemployment rate, mid-2000 was a particularly difficult time to self-build. Subcontractors were scarce and prices were high. Even seasoned builders were experiencing labor shortages. Chin and Rice admit that if they had waited, they might not have been able to self-build.

Still, despite such economic considerations, the yearn to own, if not build, a home of one's own runs deep in American culture. And, given that most self-builders are motivated not by money but by the pride of doing it themselves, there will always be some who join Thoreau in asking, "Shall we forever resign the pleasure of construction to the carpenter?”


Owner-built houses at a glance
  NOTE: A house is “owner-built” if the owner acts as the general contractor, owns the land, and intends to occupy the house. The construction may be wholly or partially subcontracted to professionals.
  SOURCE: U.S. Census Bureau and U.S. Department of Housing and Urban Development, Current Construction Reports, Characteristics of New Housing, 1999.


Fewer people are building their own homes
NOTE: A house is “owner-built” if the owner acts as the general contractor, owns the land, and intends to occupy the house. The construction may be wholly or partially subcontracted to professionals.

SOURCE: U.S. Census Bureau and U.S. Department of Housing and Urban Development, Current Construction Reports, Characteristics of New Housing.


More basements, fewer fireplaces
NOTE: A house is “owner-built” if the owner acts as the general contractor, owns the land, and intends to occupy the house. The construction may be wholly or partially subcontracted to professionals.

SOURCE: U.S. Census Bureau and U.S. Department of Housing and Urban Development, Current Construction Reports, Characteristics of New Housing, 1999.

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