Cheapest House To Build: Different Types And Styles To Know

Have you ever considered the cost of building versus buying a house?

HomeAdvisor reported that the average cost to build a home was $298,136 in 2023, which runs less than the median home sale price of $436,700 in 2023, according to the U.S. Department of Housing and Urban Development.

But can you get it even lower? And what is the cheapest house to build?

Let's take a look at the different home types and home styles that might appeal to you when you're thinking about building a new home.

What Is The Cheapest House To Build?

Home styles fall into more than one category. For example, contemporary-style homes can be ranch-style, ranch homes can be Mediterranean-style, Colonial-style homes can have Craftsman-style home features, etc. This can make it hard to determine the specific “cheapest” style of home to build.

Despite the occasional overlap in styles, there are still various ways to stay within a budget when building a house. Some factors that influence the cost of building a new house include:

• Size/square footage: The smaller the house, the more it costs per square foot (to a certain extent). Conversely, the larger the home, the less it costs per square foot.
• Design and layout: Design and layout also influence the cost of building a house. For example, building a complex home or parts of a home (such as a complicated roofline or exterior finishes) can affect the cost of your home.
• Upgrades and customization: Upgrades and customization also cost more. For example, it costs more to build a custom home than a prefabricated home. Upgrades and customization could mean picking out finishes like paint, flooring, countertops and cabinetry.
• Land and site work: If you purchase land or prepare a site for construction, it will also cost more. In recent years, land has increased in cost, but it's still possible to find good deals on land.

Learn more about buying land to build a house.

6 Cheapest Types Of Houses To Build

The following construction types are typically more cost-effective than building a traditional single-family home. Let's look at a few options for the cheapest way to build a house:

1. Prefabricated Homes

Prefabricated (prefab) homes are homes in pieces, built at an off-site location. Experts deliver them to a home site and assemble them there or assemble them completely at an off-site location and deliver to the homeowner's lot.

Prefab homes are often more affordable and eco-friendly than stick-built homes. You can buy and build them much faster than stick-built homes.

Prefab homes typically cost between $80 and $120 per square foot.

2. Kit Homes

Kit homes are also customized and built off-site by a manufacturer. They are assembled on the property upon arrival, in mail-order fashion. They are a cheaper alternative because you can achieve a custom build without a full stick-built custom build.

Kit homes also accommodate almost any home style – cottage, contemporary and more. Kit homes typically cost between $40 and $60 per square foot.

3. Tiny Homes

Tiny homes even have their own TV show, like "Tiny House, Big Living."

You may consider tiny homes as a great alternative to a custom stick-built home, though they have tradeoffs – mainly its very small living space. Tiny houses can cost less than $12,000, but typically sell for $35,000 – $80,000. If you build your own tiny home, you may pay $20,000 – $30,000.

Learn more about tiny house costs.

4. Shipping Container Homes

Shipping container homes build a foundation using shipping containers. It's likely you won't just plop a shipping container on your land – you add a shipping container to form the bulk of a home, then add to it. Shipping container homes usually run between 160 and 320 square feet. Their size, durability and modular design also help the recycling movement.

Shipping containers typically cost around $10,000 – $35,000 to build, while larger homes can cost up to $175,000.

5. Barndominiums

Barndominiums, or "barndos" combine the words "barn" and "condominium" – it's a metal building, warehouse or pole structure that people often use as work and home. They are low maintenance, energy-efficient and spacious. They're also cost-effective because steel structures are easier and faster to build than stick-built structures.

If you need large square footage, it may work for you. Learn more about converted barn homes.

Barndominium kits usually range from $50 – $100 per square foot, and the all-in cost can run between $150,000 and $300,000.

6. Modular Homes

Modular homes, a type of prefab home, are constructed completely off-site in a factory. Unlike prefab homes, they are almost always partially or fully complete when they arrive on-site. They may have a higher degree of customization than prefab homes.

Factory-built housing offers cost-saving opportunities because of the scale involved but note that modular homes often carry a similar cost to stick-built homes. You could save money by choosing the right home.

Cheaper Home Styles For Building

The following home designs and layouts can provide a more affordable building option.

Ranch-Style Homes

A ranch-style house is generally more affordable to build because it has an easy, open floor plan and is traditionally available in a rectangular or U-shaped layout. Many have a dedicated patio space for homeowners to enjoy or easy outdoor access.

Maintenance usually costs less for a ranch-style house as well. Building a ranch house generally costs between $200,000 and $600,000.

Colonial Homes

A Colonial house is generally more affordable because it has a shape conducive to lower costs due to its simple, borderline rectangular shape. They're typically two or three stories tall, with fireplaces and brick or wood facades. You'll typically find colonial homes on the East Coast of the United States.

A 3,000-square-foot colonial home would cost between $300,000 and $600,000, depending on the area where you plan to build.

More Tips On The Cheapest Way To Build A House

The cheapest ways to build a house include the following steps:

• Try the DIY approach. Building your own house will most likely cost much less than hiring a home builder. However, this home building method isn't for the faint of heart, and it could take years, especially if you have another job you go to every day. However, you can save money by becoming your own general contractor. You can save on the cost of materials. Plus, you won't charge yourself for general contracting fees!
• Use energy-efficient materials. Using energy-efficient materials may cost you less in the long run, especially after living in your dream home for a while. Do your research to determine the energy-efficient materials that may make a difference in your situation, such as solar panels, kitchen appliances, etc.
• Find the right builder: The right builder won't necessarily build your home for dirt cheap (and you want to ensure they have the right credentials, including licensing and insurance). However, a builder may understand certain financial constraints and may work with you on the costs. For example, if you have the right skills, you may agree to do all the painting yourself or the drywall.

The Bottom Line

What is the cheapest house to build?

Undoubtedly, tiny homes win the prize. However, that style home may not appeal to you, especially if you have a large family. Talk to several builders about your options before you decide the best house style for you.

Get connected with an expert real estate agent and find the perfect place to build your dream home.