How Much Does It Cost Per Square Foot to Build a Home in 2025? | Clackamas County Guide

 

If you’re planning to build a custom home in 2025, one of your biggest questions is likely: What’s the average cost per square foot? The answer isn’t always straightforward — it depends on where you’re building, the type of finishes you choose, and the complexity of the design. But if you’re building in Clackamas County or surrounding areas like Oregon City, Happy Valley, or Molalla, this guide will give you a reliable place to start.

 

At Tegman Custom Homes, we’ve helped dozens of local homeowners navigate building costs, plan smarter, and avoid costly surprises. Let’s break down what you can expect to pay in 2025.

 

The Average Cost Per Square Foot to Build in 2025

 

Across Oregon in 2025, the cost to build a new home is averaging between $220 to $350 per square foot — but local market conditions and construction trends mean the final number can vary widely.

 

Here’s how it breaks down for Clackamas County:

 

• Entry-level construction (basic finishes): $220–$260/sq ft

• Mid-range custom home: $275–$325/sq ft

• High-end custom build: $325–$400+/sq ft

 

For example, building a 2,500 sq ft mid-range custom home in Oregon City would likely cost between $687,500 and $812,500, not including land acquisition or permitting.

 

What Affects the Cost Per Square Foot?

 

Many homeowners are surprised to learn how much building costs can vary depending on small details. These are the biggest cost drivers in 2025:

 

• Home complexity: Multi-level designs, custom rooflines, or unusual shapes raise the cost

• Finish materials: Hardwood floors, custom cabinets, and stone countertops quickly push up the per-foot cost

• Site conditions: Sloped lots, soil instability, or difficult access increase excavation and foundation costs

• Labor and material trends: Inflation, regional demand, and supply chain issues all play a role

• Energy efficiency requirements: Updated codes and green building standards may require added insulation, special windows, or upgraded HVAC systems

 

In Clackamas County, where lots can vary from flat suburban infill to wooded hillsides, site prep and foundation design often make up a large part of the budget.

 

Soft Costs to Keep in Mind

 

Your per-square-foot estimate should also account for soft costs — the non-construction expenses that still impact your total investment.

 

These typically include:

 

• Permits and impact fees (which can range from $10,000 to $25,000 depending on city and scope)

• Design and engineering (architectural plans, structural calculations, and possibly energy compliance reports)

• Utility connections (especially if building on a rural or undeveloped parcel)

• Insurance and inspections

 

In cities like Lake Oswego or Happy Valley, where permitting may be more complex, budgeting an extra 15%–20% for soft costs is a safe move.

 

Clackamas County Trends That May Impact Costs in 2025

 

There are a few local factors to watch that could affect construction costs this year:

 

• Increased demand for ADUs and multigenerational homes is pushing more complex designs

• Labor shortages in the Portland Metro area continue to drive up subcontractor rates

• Stricter energy codes are adding new requirements for insulation, ventilation, and mechanical systems

• Limited lot inventory in popular areas like West Linn and Milwaukie is encouraging more full tear-downs or hillside builds, which cost more to execute

 

Working with a local builder who understands regional permitting, utility access, and seasonal challenges can help you navigate these variables with fewer delays and surprises.

 

How to Get the Most Value Per Square Foot

 

Even if you’re not aiming for the lowest cost build, everyone wants to get the most for their investment. Here are smart ways to stretch your budget:

 

• Build up instead of out: Two-story designs reduce foundation and roof costs per square foot

• Use engineered materials: Engineered hardwood, quartz countertops, and fiber cement siding offer durability without luxury price tags

• Standardize structural elements: Keep wall heights, truss spans, and window sizes standard to reduce custom framing time

• Plan ahead for site work: Poor drainage or ungraded lots can create costly surprises. Prepping your site properly can save thousands later

 

Tegman Custom Homes works closely with each client to find the right balance between quality, performance, and long-term value — without compromising the look and feel you want.

 

Conclusion

 

In 2025, the cost per square foot to build a home in Clackamas County is higher than years past — but so is the demand for thoughtfully designed, energy-efficient, and long-lasting homes. Whether you’re building on land you already own or just starting the process, knowing what to expect allows you to plan with confidence.

 

Want a more accurate estimate based on your design and location?

Contact Tegman Custom Homes for a detailed, custom quote and personalized guidance on building your dream home in Oregon City, Happy Valley, or anywhere in Clackamas County.

 

Thinking Bigger?

 

If you’re planning to remodel your basement, explore our full guide on creating functional and comfortable spaces below ground.

👉 Read our article on Home Additions 101: What to Know Before Expanding Your Home

👉 Read our article on What to Know Before Building a New Home in Clackamas County Oregon

 

 

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