The Cheapest Ways To Build a House In 2023 (Comprehensive List)


Building a house on a budget requires strategic decision-making. Opt for a smaller, simplified design. Prioritize efficiency through energy-efficient materials and careful planning of plumbing and electrical installations. Obtain necessary approvals and explore cost-saving options like DIY projects. Wise choices, efficient scheduling, and proper planning can lead to significant cost savings throughout construction.

Are you dreaming of owning your own house but concerned about the cost? Building your dream home doesn’t have to break the bank. The average cost to build a house in the United States in 2022 was $449,000, while the average existing house price was $414,200. With some savvy planning and smart construction decision-making, you have a real shot at building a house for less than it would cost to buy an already existing home in your area. In this article, we’ll explore the cheapest way to build a house and provide valuable insights on making your dream home a reality while controlling costs.

Build a smaller house

Going small can save you big. A smaller house means fewer materials and less cost. If you can cut down on square footage, this will be one of the most effective ways to save on costs. Even omitting a room or some garage space can knock a few thousand off of your bill.

You may even consider a tiny home living if you’re into that sort of thing. The benefits to tiny homes are plenty, including cost savings on construction, maintenance, and utilities. Not everyone’s life aligns with living in a tiny house, but it might be for you!

Pro tip

Local housing regulations may or may not permit tiny home construction in your area. In fact, you may only be able to get a building permit to legally construct a home on your lot if your floor plan meets minimum square footage and other requirements, such as type and number of rooms. Make sure you know what you’ll legally be able to build before you buy land.

Streamline and simplify your design

If you can’t downsize, simplify. A complex home design will inevitably lead to more money spent on engineering, permitting, and construction. To cut down on costs, assess where you can streamline your design. For example, go with a simple roof and avoid obscure twists and turns in the house. In the long run, you’ll enjoy minimal upkeep and ease of access in your home.

Build up

Building vertically can help you maximize the size of your home while still keeping building costs under control. By adding an extra level instead of building horizontally, you could save on land costs and construction costs.

Pro tip

Discuss your designs and desires with your contractor before starting any project, especially vertical construction. Make sure the person you hire to build your home is experienced and can execute the project without a doubt.

Consider manufactured homes

Adam Spigelman, home loan expert and Senior VP at Planet Home Lending advises using modular or prefab designs. He says,

Choose your materials wisely

Building materials can make all the difference in building a house cheaply. Saving money can be as simple as choosing standard materials instead of luxury ones. Before letting yourself get drawn in by the appeal of high-end and expensive choices, see if there’s a more affordable alternative in any of the following categories:

  • Reclaimed materials
  • Prefabricated materials
  • Precast concrete materials
  • Cob materials

Make a detailed budget

Budget, plan, and price out every aspect of your home construction. While construction projects rarely go exactly according to plan, having a detailed budget will benefit you and keep your project from straying too far. Don’t stop at your initial budget either, and don’t wait until the end to be surprised by the actual cost. Keep a close eye on your budget and add or adjust as new expenses arise.

Consider supplementing with a personal loan

Having some extra cash to work with may help you through rough patches during your construction project. In some cases, taking out a personal loan, separate from and in addition to the secured loan funding your build, could be a viable option.

Get thrifty and use discounts

If you don’t want to compromise on certain materials, fixtures, or appliances, try finding discounts. You may be able to get what you want for less by following one of Melanie Hartmann’s, owner of Creo Home Buyers, tips:

Prioritize efficiency

Building green has become a popular trend, and it’s not just about the environment — it’s also a cost-saving strategy. Opting for energy-efficient materials like improved insulation and high-efficiency windows may have higher upfront costs, but it can lead to long-term savings for homeowners. Consider utilizing solar panels or wind energy, but ensure their availability and suitability for your land. You may also qualify for rebates and tax breaks by incorporating energy-efficient elements into your home.

By carefully planning your plumbing and electrical installations, you can simplify the work and reduce costs. Grouping rooms that require plumbing together can make subsequent plumbing work more affordable. Similarly, optimizing your home’s wiring can lead to further savings as not all rooms require the same electrical supply.

Do what you can yourself

If you have building experience or a reliable network of skilled labor, taking on the role of your own contractor and managing the home-building process can save costs. Doing a lot of work yourself is one of the most economical ways to build a house. However, if you lack experience, you should hire subcontractors for specific tasks to avoid costly mistakes. While DIY projects like painting or flooring can be cost-effective, significant jobs such as plumbing or electrical should be left to professionals to prevent future expenses caused by needing to fix errors.

Schedule way ahead

Efficient scheduling in a construction project can lead to cost savings. Coordinating multiple contractors is challenging, as the best specialists are often booked months in advance. Starting the contractor search and planning early on increases the likelihood of securing everyone simultaneously, minimizing the need for expensive last-minute arrangements.

Spend money

You read that right. One way to save money on a home build is to spend money! Investing in high-quality, trustworthy local custom home builders can lead to long-term cost savings. Although experienced home builders may come at a higher cost, their expertise allows them to guide you on intelligent spending choices and offer creative money-saving ideas. Additionally, their experience helps prevent problems from arising, ultimately saving you money and avoiding potential pitfalls.

Choose the right loan

Sebastian Jania, owner of Manitoba Property Buyers, explains how the right loan can help you accomplish a cost-effective home build:

Plan approval is key

Properly obtaining plan approval is crucial for cost-effective home building. Delayed permits can result in wasted time and increased expenses. Making changes during construction can also significantly raise costs. Getting plans approved early prevents fines and the need to redo completed work. Additionally, securing an approval letter from your lender is essential to avoid potential loan complications later on.

Choose your location wisely

“Depending on the city of choice, development costs, and rezoning costs can add up to a fortune,” says real estate expert Sebastian Jania. Before buying land to build a home on, consider what location-associated costs or savings might come along with that market.

FAQ about cheap ways to build a house

What are some cost-effective building materials and construction methods for building a house on a budget?

Cost-effective building materials include recycled materials, prefabricated components, and energy-efficient options. Construction methods like modular construction can also be budget-friendly.

Are there any government programs or incentives available to help reduce the cost of building a house?

Government programs and incentives, such as tax credits or grants, may be available for energy-efficient or affordable housing initiatives.

How can one find affordable land or lots to build a house on?

You can find affordable land or lots by visiting real estate websites, attending local land auctions, or contacting local authorities for potential development opportunities.

What are some strategies for minimizing construction costs and staying within a tight budget?

Strategies for minimizing construction costs include efficient planning, careful material selection, and design simplification.

Are there any DIY or self-building options that can significantly reduce the cost of building a house?

DIY or self-building options can save costs, such as acting as your own contractor or performing specific tasks like painting or landscaping.

What are some potential trade-offs or considerations to keep in mind when opting for the cheapest way to build a house?

When opting for the cheapest way to build a house, trade-offs may include the following:

  • Lower-quality materials
  • Limited customization options
  • Longer construction timelines
  • Potential challenges with permits or code compliance

Key takeaways

  • Size matters. Building a smaller, simplified house can result in substantial cost savings.
  • Smart construction choices can lessen building costs. Opt for vertical construction, manufactured homes, and cost-effective building materials to maximize space and reduce expenses.
  • Efficiency is critical when trying to build a house for cheap. Prioritize energy-efficient materials, plan plumbing and electrical installations carefully, and consider DIY projects for cost savings.
  • Proper planning and approvals are essential. Obtain plan approval early, secure a lender’s approval letter, and make informed decisions to stay within budget and avoid potential pitfalls.
Have you heard of a spec house? “Spec” is short for speculative, and it’s another home buying option where the home is move-in ready, and you get to customize it. Click here to learn more!
View Article Sources
  1. Background articles from mortgage banking and home ownership sites — Various
  2. New and Existing Single Family Home Prices, U.S. — National Association of Home Builders
  3. How Much Does It Cost to Build a Duplex House… — SuperMoney
  4. How to Build a Tiny Home and 6 Ways to Financing It — SuperMoney
  5. Should You Buy a Tiny House? Pros and Cons — SuperMoney
  6. What Is a Modular Home? — SuperMoney
  7. What is a Spec House in Real Estate? — SuperMoney
  8. What Is The Cost To Build an A-Frame House…? — SuperMoney