What goes into building a custom home
The stages of a custom home, what each one costs as a share of the budget, which permits Oregon requires, and what a licensed contractor has to carry.
Updated 23 August 2026 · AY Carpentry & Interiors, Salem, Oregon
Key takeaways
- Custom home building means one contractor is involved from the early stages of a project through completion, coordinating clients, designers, architects and subcontractors.
- Nationally, interior finishes are the single largest slice of construction cost at 24.1%, ahead of major system rough-ins at 19.2% and framing at 16.6%.
- A building permit is required in Oregon to construct, enlarge, alter, repair or move a residential building, and a permit expires if work does not start within 180 days.
- Structural, electrical, plumbing and mechanical permits are separate. Work exempt from one is not automatically exempt from the others.
Our custom home building work allows us to be involved from the early stages of a project through completion, coordinating the construction process and working with clients, designers, architects, and subcontractors to bring their vision to life.
The stages of a custom home, and what each one costs
Every custom home runs through the same sequence: site work, foundation, framing, the mechanical rough-ins, then the finishes. What changes between projects is the specification, not the order.
The National Association of Home Builders surveys builders each year on where the construction budget actually goes. The 2024 survey is a useful sanity check when you are deciding where to spend, because it shows that the finishes you can see account for roughly a quarter of the cost, while the structure and systems you cannot see account for close to half.
| Stage | Share of construction cost | What sits inside it |
|---|---|---|
| Interior finishes | 24.1% | Cabinets, flooring, painting, lighting, appliances, fixtures |
| Major system rough-ins | 19.2% | Plumbing, electrical, HVAC |
| Framing | 16.6% | Structural framing, roof trusses, sheathing |
| Exterior finishes | 13.4% | Siding, roofing, windows, exterior doors |
| Foundations | 10.5% | Excavation for footings, forming, concrete |
| Site work | 7.6% | Permits, impact fees, site prep, utilities |
| Final steps | 6.5% | Landscaping, clean up, final inspection |
| Other | 2.1% |
Source: NAHB, Cost of Constructing a Home, 2024. Construction was 64.4% of the average new home sale price in that survey.
Who is involved, and who coordinates them
A custom home is not one trade turning up to do one part of the job. Excavation, concrete, framing, roofing, plumbing, electrical, HVAC, insulation, drywall, cabinetry, tile, flooring and paint all have to arrive in the right order, and the schedule is the product, not a by-product.
Coordinating multiple subcontractors and trades is one of the problems we solve for homeowners, along with turning architectural plans into finished construction. See how we approach custom home building.
Permits: what Oregon actually requires
In Oregon, a building permit is required to construct, enlarge, alter, repair or move a residential building or structure. Structural, electrical, plumbing and mechanical permits are issued separately, and the person performing the work is responsible for obtaining them. Permitting and inspection services are part of what we provide, so that responsibility sits with us rather than with you.
| Permit type | Typical trigger | Notes |
|---|---|---|
| Structural or building | Room additions, garages over 200 sq ft, wall modifications, decks and stairs | A permit expires if work is not started within 180 days of issue |
| Electrical | Installing or altering any permanent wiring or electrical devices | The permit must be on site and available to the inspector |
| Mechanical | Installing or changing any part of a heating or cooling system vented into a chimney | LP gas work requires state licensing |
| Plumbing | Replacing water heaters, altering concealed piping, new installations and relocations | Minor label permits exist for some work |
Source: Oregon Building Codes Division, About Oregon residential building permits.
What a licensed Oregon contractor has to carry
Every contractor working in Oregon must be licensed with the Construction Contractors Board, and the endorsement they hold sets the bond and insurance they must carry. AY Carpentry & Interiors LLC holds CCB #233047.
| Residential endorsement | Surety bond | Liability insurance |
|---|---|---|
| Residential General Contractor | $25,000 | $500,000 per occurrence |
| Residential Specialty Contractor | $20,000 | $300,000 per occurrence |
| Residential Limited Contractor | $15,000 | $100,000 per occurrence |
| Residential Developer | $25,000 | $500,000 per occurrence |
Source: Oregon CCB Licence Endorsements chart, revision 11/2024. You can look up any Oregon contractor by licence number on the CCB website.
The same shares, in dollars
Percentages are hard to plan against. The NAHB survey also publishes an average construction cost of $428,215 for a single family home in 2024, so the shares can be read as money. The table below is simple arithmetic on those two published figures. It is a national average worked out in dollars, not a quote, and no part of it is a price from us.
| Stage | Share | Applied to the $428,215 national average |
|---|---|---|
| Interior finishes | 24.1% | about $103,200 |
| Major system rough-ins | 19.2% | about $82,200 |
| Framing | 16.6% | about $71,100 |
| Exterior finishes | 13.4% | about $57,400 |
| Foundations | 10.5% | about $45,000 |
| Site work | 7.6% | about $32,500 |
| Final steps | 6.5% | about $27,800 |
| Other | 2.1% | about $9,000 |
Source: Arithmetic applied to the NAHB Cost of Constructing a Home 2024 survey, which reported average construction cost of $428,215. Averages describe the national picture, not your project.
Two things fall out of that table. The first is that the half of the house you never see again after drywall goes up, the foundation, the framing and the rough-ins, is close to half the money. The second is that the quarter you look at every day, the finishes, is the quarter where your own decisions have the most room to move.
The build sequence, and the inspections inside it
Residential construction runs in a fixed order because each stage covers up the one before it. Concrete has to be inspected before it is poured over, framing has to be inspected before insulation hides it, and rough plumbing, electrical and mechanical have to be inspected before drywall closes the wall. That is why a missed inspection is not a paperwork problem, it is a demolition problem.
Building in Salem and the Willamette Valley
Oregon runs a statewide building code, so the rules that apply in Salem are the rules that apply across the state, administered locally. The Oregon Residential Specialty Code governs one and two family dwellings and townhouses, and the Building Codes Division sets which work needs a permit. What varies locally is the queue: the City of Salem publishes a normal review timeline of 10 working days for residential permits, and that clock starts the next working day after plan review fees are paid and plans are uploaded, not when you first call.
Local conditions shape the build as much as the code does. Valley soils, winter rain and the wet season between roughly November and April all affect when it is sensible to excavate, pour and dry a house in. Sequencing a build so that the shell is closed before the weather turns is a scheduling decision made months earlier, at the point where drawings and permits are still being settled.
What to ask a contractor before you sign
Homeowners tell us the same worry in different words: they are not sure how to tell one bid from another. These are the questions that separate them.
| Question | Why it matters |
|---|---|
| What is your CCB licence number? | Every contractor working in Oregon must be licensed with the Construction Contractors Board, and anyone can look the number up |
| Which endorsement do you hold? | The endorsement sets the bond and insurance floor the contractor must carry |
| Who pulls the permits? | The person performing the work is responsible for obtaining permits. If a contractor asks you to pull them, ask why |
| Who is on site day to day? | Coordinating multiple subcontractors and trades is the job. Ask who does it |
| How are selections and changes handled? | Finishes are the largest slice of construction cost and the most common source of change |
| How do you communicate progress? | Poor communication and lack of transparency during projects is one of the most common complaints homeowners have |
Source: Licence and permit points from the Oregon CCB and the Building Codes Division. Cost share from NAHB 2024. Communication point from the problems AY Carpentry and Interiors solves for homeowners.
Where to start
Contact us to discuss your upcoming project and schedule a consultation. That first conversation is where we work out what you are trying to build and what it will take. If you already have plans, bring them. We build from plans other people have drawn as a matter of routine.
Frequently asked
Do you handle the entire project or just the carpentry?
The entire project. We coordinate the construction process and work with clients, designers, architects and subcontractors, and project management and permitting are part of what we provide.
Can you work with existing plans?
Yes to both. Turning architectural plans into finished construction is a large part of what we do, and we work alongside designers and architects from the early stages of a project through completion.
What is the process for starting a custom home?
Contact us to discuss your upcoming project and schedule a consultation. That first conversation is where we work out what you are trying to build and what it will take.
How much of a build budget goes on finishes?
In the NAHB 2024 Cost of Constructing a Home survey, interior finishes were 24.1% of construction cost, the largest single share, ahead of major system rough-ins at 19.2% and framing at 16.6%.
How long is an Oregon building permit valid before work starts?
The Oregon Building Codes Division states that a permit expires if work is not started within 180 days of its issue.
What bond and insurance does a residential general contractor carry in Oregon?
The Oregon CCB endorsement chart, revision 11/2024, requires a Residential General Contractor to carry a $25,000 residential surety bond and $500,000 per occurrence liability insurance.
How long does residential plan review take in Salem?
The City of Salem publishes a normal review timeline of 10 working days for residential permits. The clock starts the next working day after plan review fees are paid and plans are uploaded.
Do I need separate permits for electrical and plumbing?
Yes. In Oregon, structural, electrical, plumbing and mechanical permits are issued separately, and work exempt from one is not automatically exempt from the others.
Sources
- NAHB, Cost of Constructing a Home, 2024 survey. eyeonhousing.org
- Oregon Building Codes Division, About Oregon residential building permits. www.oregon.gov
- Oregon Construction Contractors Board, CCB Licence Endorsements chart, revision 11/2024. www.oregon.gov
- Oregon Construction Contractors Board, Licensing. www.oregon.gov
Contact us to discuss your upcoming project.
Custom home, whole-home remodel, major addition, or a high-end kitchen or bathroom renovation. Call, email or send us a message and we will schedule a consultation.