Does a Bigger House Always Cost More Per Square Foot?

Usually the opposite. Larger homes typically cost less per square foot than smaller ones. It feels backwards, and it's one of the reasons per-square-foot comparisons between different sized homes are close to useless.

Why

The expensive parts of a house don't scale with its size. A kitchen, the baths, the mechanical systems, the electrical panel, the stairs and the roof structure cost roughly what they cost whether the house is 1,700 square feet or 2,600. What a larger house adds is mostly the cheapest kind of space: framed, drywalled, floored, painted rooms.

Spread the fixed expensive parts across more square footage and the average per foot falls. Nothing has gotten cheaper. The denominator got bigger.

What this means practically

• Don't compare per-foot costs across different sizes. A 1,750 square foot home priced higher per foot than a 2,554 square foot home is completely normal, not a sign anything is wrong.
• Adding square footage is often cheaper than you'd guess. If you're on the fence about a bonus room or a deeper garage, price it. The marginal cost of simple space is lower than the average.
• Removing square footage saves less than you'd hope. Cutting 200 square feet of bedroom out of a plan to hit a budget rarely moves the number as much as expected, because you didn't cut a kitchen.
• Adding expensive rooms is expensive. A third full bath or a second kitchen area moves the number far more than the same square footage of living space.

Where the real savings are

Not in size. In simplicity of shape, in the number of expensive rooms, in roofline complexity, and in finish level. A simple rectangle with a straightforward roof and good finishes will beat a complex footprint with cheap finishes on both cost and how it feels to live in.

See why price per square foot misleads and what actually drives cost.