Cheapest Homes to Build: Options for Every Lifestyle

You don’t have to break the bank to build your dream home. With prices rising and sustainability on everyone’s mind, more people are looking for affordable ways to build homes without sacrificing style, comfort or practicality. The best part? There are plenty of budget friendly ways to build a home from scratch to suit every lifestyle and need.

Whether you’re a DIYer, an eco warrior or just looking for the cheapest way to put a roof over your head, we’ve got you covered. From prefab wonders and modular masterpieces to container chic, tiny homes and barn dominium we’ll help you find your perfect match.

What Affects Home Building Costs

So many variables go into what it actually costs to build a home. It’s hard to pinpoint the price tag for anyone looking into this. In 2024, the average cost per square foot was $158 or $332,376 for a 2,100 sq ft home.

Before we get into the cheapest homes to build let’s look at what affects construction costs. These include:

Materials and Construction Methods

The type and amount of materials used in the building process can have a big impact on costs. Buildings made from reclaimed wood are priced way differently from steel frames. Other methods like concrete block or wood framing are also options. The challenge is finding a material that’s durable and affordable.

Materials costs may vary based on what’s available locally. If you have to bring in lumber that increases material costs. Supply chain disruptions or scarcity of certain materials can drive up prices. And it’s not just the framing–flooring, cabinetry and roofing materials impact costs.

Size and Design Complexity

Simple designs with minimal square footage are naturally cheaper to build than sprawling complex ones. There’s a saying: “the more angles the more expensive!” Unique floor plans or custom architectural features increase costs. Simple designs like square and rectangular shapes are generally the cheapest.

Location

That 2,100 sq ft house? Same house, different state and the price difference was $140,000. It shows how location can really impact construction costs. Desirable areas like vacation towns or great school districts cost more.

Land Preparation

Grading, clearing and prepping a piece of land can be expensive if the terrain is tricky. Soil stability and drainage may require extra work. Rural areas may require wells, septic systems or off grid solutions which are more expensive.

Labor Costs

Labor rates vary by region, demand and availability of workers. Hiring local contractors or going the DIY route affects your costs. Skilled labor for specialized tasks (e.g. masonry or custom woodwork) increases overall costs.

Permitting

Local building codes, zoning laws and required permits add to the expense. Some don’t allow certain types of dwellings like pole barn houses or accessory dwelling units. Compliance with environmental or energy efficient building standards increases costs.

Construction Timeline

Delays due to weather, supply chain issues or labor shortages can increase overall costs. Changes made during construction (change orders) can disrupt timelines and budgets. Expedited timelines require additional resources and increase costs.

Take these into consideration as you look at different types of homes.

Prefabricated Homes

Prefabricated homes, or “prefabs,” are factory built homes delivered to your building site in sections and assembled like life-size LEGO pieces. They use prefabricated panels already set up with windows and doors. Customizable floor plans, energy efficiency and durable construction are features of prefab homes.

Many prehab homes are designed with energy efficient systems like solar panels which can save you money in the long run but may add to the initial cost. Most are designed to meet or exceed local building codes.

Cost Benefits

With prefabs you get economies of scale since they’re built in factories. The controlled environment minimizes material waste and speeds up production, reduces costs and waiting time. The number and size of modules affects the cost. Larger homes or more complex layouts require more materials and labor.

Site preparation for installation including foundation work affects the total cost. On site assembly and integration (e.g. attaching modules and connecting utilities) requires skilled labor.

Pros and Cons

Suburban or rural areas are best for prefabricated homes where you have space for delivery and assembly of the prefab panels. Some areas may have restrictions or additional requirements for modular construction.

Prefab homes are affected by material prices, labor rates and manufacturing demand. Made with steel frames they don’t always deliver the same energy efficiency benefits as other construction methods. They can also depreciate faster than traditional buildings. The purchase price doesn’t include land cost.

Modular Homes

Modular homes take prefabs further with more robust structural components and permanent installations. Where prefabricated homes are built in panels or other large pieces, modular homes are built in “blocks” or “rooms”. Like prefab, they are factory built and assembled on site.

Modules are built in factories, reducing construction time significantly. They range from small, minimalist designs to full custom homes. More customization.

Cost Benefits

Modular homes are 10-20% cheaper than stick built homes and faster construction time. But more expensive than manufactured homes, also known as mobile homes.

Pros and cons

Flexibility in architectural styles and interior design appeals to buyers who want more customization but lengthens the construction time. Still faster than on site built homes. They comply strictly with zoning laws and building codes making modular homes a solid long term investment. Some can withstand winds up to 180 miles per hour.

Container Homes

Container homes repurpose steel shipping containers into modern, sustainable housing. These compact homes offer a chic, industrial look, are built to last (thanks to steel construction) and have potential mobility for relocation. Popular among minimalists and eco conscious individuals looking for a unique, sustainable type of home.

Cost Benefits

Recycled materials make container homes affordable with low upfront costs. Eco friendly design reduces environmental impact.

Pros and Cons

Container homes are durable, can withstand extreme weather conditions and provides excellent structural integrity. Mobility allows for flexibility in location making them perfect for off grid living or temporary setup. But insulation in container homes can be tricky as steel conducts heat and cold. Retrofitting containers for residential use including adding plumbing, electrical systems and insulation can add cost and complexity.

And zoning laws and permits may restrict the use of shipping containers for housing in some areas. Despite the challenges they are sustainable and affordable so they are an attractive option for eco friendly living.

Tiny Homes

Tiny homes are compact, efficient living spaces designed to maximize functionality in a small footprint. Ranging from 100 to 400 square feet they are for individuals or families who want a simpler life, reduced expenses or increased mobility. They can be built on foundations or designed as mobile units on trailers depending on the owner’s needs.

Cost Benefits

Tiny homes are overall much cheaper than traditional homes, both in construction and maintenance. Smaller size means lower material and labor costs, lower utility bills and minimal upkeep. Many tiny homeowners also save on property taxes and other fees by going mobile. But high end materials and custom designs can add to the initial cost.

Pros and Cons

Tiny homes promote sustainable living with smaller environmental footprint and energy efficiency. Perfect for those who want to downsize or those who value low cost, minimalist lifestyle. But zoning restrictions and limited space for storage or large families are major drawbacks. And adjusting to a smaller living space requires getting used to and possibly downsizing.

Barndominium-Style Homes

Barndominiums also known as “barndos” and “shouses” combine barn inspired architecture with residential living spaces. Open floor plans, rustic charm and multi use spaces that can double as workshops, studios or garages. This house design style started as metal structures with living spaces. Over time it has evolved to include more complex floor plans often with timber frames instead of traditional metal barn construction.

Cost Benefits

Simple framing and roofing design makes barn style homes more affordable than traditional homes. A steel barndominium is more cost effective to build per square foot because the exterior is essentially a metal structure which simplifies the construction process.

Pros and Cons

This house style is for DIY construction enthusiasts in rural areas or homeowners looking for a live-work hybrid space. Also popular with equestrians or those who want a rustic farmhouse look. You’ll have lots of extra storage for your workshop or farm gear. But some may not like metal construction and prefer traditional homes. And zoning laws and building codes may restrict the use of barndominiums in some areas.

A-frame Homes

Recognizable by their triangular shape these homes were popular as vacation homes in the 50s and 60s. Why? Because they were cheap and fast to build compared to traditional homes. Modern A-frame homes still have cost effective, simple designs that make them popular among budget conscious homeowners. You can DIY, buy pre engineered plans or buy an A-frame kit home.

Cost Benefits

A-frames have a simple structure with minimal materials. Remember less materials means lower costs so they are a cheap architectural option for those who want to build their own home. They also help with energy efficiency and insulation in colder climates because of their compact shape.

Pros and Cons

The design makes A-frames unique and provides functional benefits like high ceilings and open floor plans. Easy to install solar panels. The open floor plan allows for some customization as all the load is on the exterior walls.

But some may find the sloping walls limiting for storage space or interior design options. And not suitable for large families or those who need more privacy because of the open layout.

Kit Homes

You can order by mail groceries, prescriptions, entire wardrobes…why not a home too? Kit homes are pre designed and pre cut to be easy to assemble on site by 2 people with little construction experience. They are one of the cheapest house plans and you can have any style of home while using cost effective materials.

Cost Benefits

One of the best things about kit homes is their affordability. Since they come with all the components, walls, roofs and insulation builders save on labor costs and have a clear plan to follow. Also kit homes require fewer specialized tools and skills so less expenses. Depending on the design and materials chosen building a kit home can be significantly cheaper than traditional homes, some options are under $50,000.

Pros and Cons

Kit homes provide many benefits for those looking for affordable housing solutions. Modular design allows for some customization so you can choose what fits your style and needs. And quick construction time, you can move in within a few months.

But the quality of materials may vary and buyers should research well the company. And while kit homes can be customized the building plans may be limited compared to a traditionally built home. Zoning restrictions or building permit challenges depend on the location.

Cost Comparison

Here’s a breakdown of the average cost per square foot for each affordable house design:

• Prefabricated Homes: $50-$100 per square foot (base unit)
• Modular Homes: $50-$200 per square foot (site prep)
• Container Homes: $150-$350 per square foot
• Tiny Homes: $200-$400 per square foot (compact and custom design)
• Barndominiums: $70-$160 per square foot
• A-Frames: $100-$300 per square foot
• Kit Homes: $40-$60 per square foot (not including land cost)

While upfront costs may vary, many homes offer long term savings through energy efficiency, low maintenance and lower utility bills. Keep in mind the hidden costs, land preparation, utility hookups and permits when budgeting for your new home.

Choosing the Right Affordable Home for You

Choosing the cheapest type of home to build depends on a few things.

Lifestyle Fit: Do you want to run a small workshop from home? A barndominium might be the way to go. Do you want to downsize and live simply? Look into tiny homes or container homes.

Set Your Budget: Determine your budget by factoring in upfront and hidden costs. Prioritize what’s must haves. Look into alternative financing if needed.

Know the Rules: Before you get too excited about prefab or container homes research the zoning laws and local building codes to make sure your chosen type of home is allowed in your area.

Cheapest House to Build

If there’s one thing to take away from this guide it’s that you don’t have to compromise to own your dream home. Affordable housing no longer means sacrificing comfort or style. Take some time to research, talk to builders and visit model homes to see these innovative housing solutions in action.