What’s the Most Expensive Part of Building a New House? (2025 Guide)

blog,Costs to Build A Custom Home / September 18, 2025

Building a new house is equal parts thrilling and complex and the budget is where expectations meet reality. So what actually costs the most in 2025? National Association of Home Builders (NAHB) data shows that interior finishes make up the largest share of construction costs, followed by major system rough-ins (mechanical, electrical, plumbing) and framing. Foundations still matter a lot, especially in the Chicago suburbs with clay soils and deep basements but they’re a smaller slice of construction cost than most people expect.

Interior Finishes: The Top Cost Driver

NAHB’s latest Cost of Construction Survey (survey conducted in 2024) finds interior finishes account for roughly 24% of total construction costs. That’s your drywall, interior doors and trim, flooring, cabinets, countertops, painting, hardware, and so much more. With thousands of square feet to complete, it’s easy to see why costs add up so quickly.

Save smart: lock selections early, standardize finishes where possible, and avoid last-minute change orders. Our Design-Build Process folds design and construction together so specs match budget before we break ground.

Major System Rough-ins: Hidden but Huge

Mechanical, electrical, and plumbing rough-ins are the second largest expense bucket accounting for roughly 19% of construction costs. Layout choices, fixture quality, and energy-code requirements all influence this line item. Opting for higher-efficiency HVAC, ERV/HRV ventilation, or smart controls may increase upfront cost but can cut operating costs and improve comfort.

2025 Illinois Energy Code:

The 2021 Illinois Energy Conservation Code took effect Jan 1, 2024 statewide, tightening air-sealing, insulation, mechanical efficiency, and blower-door testing. These new codes have caused some cost inflation for custom home builders in Chicagoland.
City of Chicago projects follow the 2022 Chicago Energy Transformation Code (based on 2021 IECC) with city-specific add-ons (e.g., solar-ready roofs). Factor these into MEP design and budgeting.

Framing: The Bones Of Your Custom Home

Framing accounts for 16–17% of construction cost and includes floor systems, walls, roof, and sheathing, plus labor. In 2025, lumber and metal prices remain volatile; lead times and tariffs can ripple into bids. Proper framing is where long-term durability is won or lost. Getting walls plumb, spans engineered, and openings flashed correctly pays off in finishes and energy performance later.

Lumber Prices YoY September 2025: According to NHAB research, as of September 5th, 2025, composite lumber is down roughly 3% YoY “reaching its lowest level since August 2024” while soft lumber is 2.8% higher than it was last year. With looming tariffs, labor costs on the rise, and other external factors, lumber prices change almost daily.

Exterior Finishes: Making Your Curb Appealing

Exterior finishes (siding/brick/stone, roofing, exterior trim, and windows) represent 13% of construction costs. With Chicagoland’s versatile weather, it’s important to work with trusted and local custom home builders that understand the climate and the right materials to use.

Is a metal roof right for my custom home in Chicagoland? With beautiful Fall weather, father winter quickly comes in behind. Chicagoland’s freeze/thaw winters can take a toll on your homes roofing system. Consider installing a metal roof that is built to withstand harsh winters and Spring winds.

Foundations & Basements: Big Decisions Below Grade

Foundations sit near 10–11% of construction costs on average but can vary greatly. In the Chicago suburbs, many owners choose deep-pour basements for ceiling height and resale value. Deep-pour basements offer great additional living or storage space, but deeper excavations, taller walls, engineering, drainage, and insulation add cost. Good waterproofing and drainage are non-negotiable: think perimeter drains, sump systems, and capillary breaks.

Site Work & The Lot: The “Before You Build” Costs

Site work is roughly 7–8% of construction cost and includes things like surveys, soils reports, demolition, tree protection, erosion control, temporary utilities, grading, and utility tie-ins. That’s separate from the finished lot itself, which NAHB reports at 13.7% of the total sales price in 2024 (down from 17.8% in 2022). The lot you choose can swing budget more than any finish—tight setbacks, utility relocations, or stormwater rules can add real money.

For a deeper dive on permits and process, see our Illinois New Home Construction FAQ.

What Rising Costs Mean for Your 2025 Custom Home Building Budget

Construction now comprises a record 64.4% of the average home’s sale price (up from 60.8% in 2022). That makes early cost discipline critical: finalize scope, pick finishes decisively, and let design drive the budget not the other way around.

Where Homeowners Overspend (and How to Avoid It)

Selections sprawl. Ten different tile selections across bathrooms sounds fun until it compounds labor complexity. Standardize where possible; upgrade a few focal areas.
Late changes. Change orders cascade: re-design → re-price → re-schedule → re-install. Finalize key decisions during pre-construction.
Under-scoped mechanicals. Right-sized HVAC with proper duct design avoids comfort complaints and rework.
Skipping mockups & samples. Approve stain, grout, and paint sheens before crews mobilize; it saves time and touch-ups.
Ignoring maintenance. Choose materials for Chicagoland’s freeze-thaw cycles and UV—lower lifecycle cost beats the cheapest bid.

A Realistic 2025 Build Path (Step by Step)

Discovery & Budget Fit. Align goals, wishlist, and budget range. Start with our Design-Build Process.
Pre-Construction Agreement. Plans, engineering, soils, surveys, and permit road-mapping.
Selections & Value Engineering. Lock the finish palette that fits budget; value-engineer structure & systems before bids go out.
Permits & Scheduling. Coordinate municipal requirements and inspection cadence.
Build & QA. From excavation and foundation to punch list and warranty, our project managers keep you informed with clear milestones.
Move-in & Aftercare. We stand behind our work and support you through warranty and seasonal maintenance. See Illinois New Home Construction FAQ for timelines and what to expect.

FAQ (2025)

What single area tends to surprise owners the most?
Interior finishes. Individually they seem small; together they’re the biggest share of construction cost in 2024/2025 data. Plan finishes early and stick to them.

Does Chicago’s energy code change my budget?
If you’re building in the City of Chicago, the CETC adds requirements (e.g., solar-ready) on top of the 2021 IECC framework. Outside the city but within Illinois, the 2021 IECC applies statewide for permits filed Jan 1, 2024 or later. Both can affect envelope and mechanical costs.

Is the lot or the house more expensive?
Both matter. The lot (finished) averaged 13.7% of the total sales price in 2024, but difficult sites can push site work up. Evaluate utilities, drainage, setbacks, and tree/soil conditions before you buy.