What Is the Cheapest Type of House to Build?

By PropertyClub Team
May 4th 2024
The cheapest type of home you can build is a prefabricated house, starting at $90 per square foot. Although they offer limited design flexibility, they are an economical choice. For those seeking more customization, ranch-style houses provide a viable alternative, with costs beginning at approximately $200 per square foot.

As housing and construction material costs escalate, many prospective homeowners are seeking cost-efficient building strategies. This guide is designed to assist you in identifying the most economical types of houses to build, considering factors such as cost per square foot, construction duration, energy efficiency, ongoing maintenance expenses, design adaptability, compliance with zoning regulations, and architectural styles.

hash-mark5 Cheapest Types of Homes to Build (2024)

  1. Prefabricated House
  2. Off-Grid House
  3. Shipping Container Home
  4. Tiny House
  5. Ranch-Style House

1. Prefabricated Homes ($90+ per square foot)

The cheapest type of house to build is a prefabricated home, which offers a cost-effective per square foot construction. These homes are available in various sizes, including several small options that are particularly affordable, ranging in price from $40,000 to $70,000. Additionally, many prefabricated homes are designed with environmental sustainability in mind, making them an appealing choice for those who prioritize eco-friendliness.

2. Off-Grid Homes ($125+ per square foot)

Living off the grid in your own secluded home might sound like paradise to some, and it’s also an affordable way to construct your new home. If you’re willing to go off the grid, you can typically avoid some of the additional costs of building a home, such as permits, inspections, and things like that. Without having to respond to any authority having jurisdiction, you can do much of the work yourself if you’re comfortable, which can save vast amounts of money.

Of course, the issues with living off the grid are that you’re off the grid. This may mean you don’t have the typical luxuries of life such as plumbing, electricity (unless you go solar or use a generator), internet access, etc. For some, this type of life is perfect, but for others, they may be looking for a bit more of a normal living experience. 

3. Shipping Container Home ($150+ per square foot)

The second cheapest type of house to build in 2024 is a shipping container home. Living in a shipping container may not sound like the ideal situation on the surface, but shipping container homes have become more popular in recent years. When you envision building a shipping container home, the key thing to keep in mind is that you won’t just be living in a dirty, rusty shipping container just sitting on the ground. Well, you could, but that’s on you. 

People have figured out creative and, frankly, beautiful ways to use shipping containers to build unique, comfortable, and modern homes. And the cost of building a shipping container home is a small fraction of the cost of other home building methods. Shipping containers can be stacked and oriented in many different ways to provide you with the perfect home of your dreams.

4. Tiny House ($175+ per square foot)

Another option for building a cheap home that has been gaining traction lately is building a tiny or tiny house. As the name suggests, tiny homes are just that — tiny. They are usually designated for homes with a square footage of less than 500 square feet, with some being even as small as 100 square feet worth of living space.

Living in a home that is only 100 square feet would be similar to living in a large shed in your backyard. But as you increase the size and get up to 400-500 square feet, it becomes more appealing to more and more people. While still incredibly small, even when compared to most apartments, 400+ square feet is livable if you get creative and make the absolute most out of the space. Building a tiny home is regulated in many areas, so be sure you understand any restrictions before you dive in and start building your dream tiny house.

5. Ranch-Style House ($200+ per square foot)

Ranch-style homes have the cheapest construction methods of more traditional homes. So, if you want to build a home that is much more normal to what you’d expect a house to be than the other options we’ve gone through here, building a ranch-style home might be the best option. These one-story homes are fairly basic in premise and design but can certainly be expanded upon to build a truly remarkable home at a better price.

One of the big savings of ranch-style homes is that they are typically just one story without even a basement. This type of construction saves the costs of adding second and third floors, but it also saves significant money by not including a basement and all the costs associated with having built.

hash-markCheapest Homes to Build Compared

It's essential to consider your specific needs when deciding on the what type of house to build as some of the cheapest homes you can build might not accomodate your preferences. Consider that the cost of building a home will vary significantly based on your specific needs. Two of the most important factors that the price of building a house depends on include the type of home being built and the materials chosen during construction. If you sit down and plan out your new home with affordability in mind, there are certainly avenues you can take to get the best deal possible. 

hash-markTips and Tricks to Cut Costs When Building a House

  • Use Affordable Materials
  • Keep the Walls and Roof Simple
  • Increase the Vertical Footprint
  • Use Stock Materials Rather than Custom

No matter what type of house you decide to go with during your quest for a cheap home, there are a few things to keep in mind that will help keep the prices as low as possible.

1. Use Affordable Materials

The choice of material in home building is one of the biggest cost factors. Utilizing used or reclaimed materials (wood, bricks, etc.) can save huge amounts of money. Other decisions to save money can include wood framing, vinyl siding, and using veneers instead of the real things. 

2. Keep the Walls and Roof Simple

The simplest design — and also the cheapest — to build is a box with a straight roof. That means to avoid any protrusions or nooks and crannies in the walls of the house as those add design and construction costs. Similarly, a straight and simple roof with no peaks and no fancy spires or anything will also save substantial costs.

3. Increase the Vertical Footprint

One of the keys to saving money on construction is to build up rather than out. Many people might not know this, but building more floors is much more affordable than increasing the home's footprint. This is because the savings on land, excavation, foundation, etc., far outweigh the additional costs of extra floors. 

4. Use Stock Materials Rather than Custom

Costs increase when people begin adding custom materials into the home. Whether it’s custom cabinets, countertops, or anything similar, these will cause prices to skyrocket. So instead, use stock cabinets and countertops and work them into the design to save a lot of money.

hash-markCheapest House to Build Bottom Line

Building a home is often more affordable than buying one that’s already finished. However, if cost is a concern, you'll want to be familiar with the cheapest types of houses to build. While building a home is always going to cost you something, it can be much cheaper than the typical prices perpetuated in the industry. If you’re willing to be unique and build a home with cost savings in mind as one of the top priorities, you can easily do so. Any of the four types of homes here will save you a lot of money compared to typical construction, and following the tips and tricks will keep costs as low as possible. 

So get out there and build your new home for much less than you thought possible!