Cheapest ways to build a house: 12 tips for affordable home building

If you live in a part of the U.S. where housing isn’t as affordable as it is in other places, you may be looking for the cheapest way to build a house instead of buying one. With so many cost-saving options available, building a budget-friendly home is doable in many cases.

Building can be cheaper than buying an existing house if you make strategic choices regarding house size, building materials, floor plan and more. If you want to keep your building costs on the lower side, you can find plenty of ways to maintain a low budget for a new-construction home. In this article, we’ll explore some of the ideas and strategies that can help you affordably build a new home.

How much does it cost to build a home?

The average cost to build a home spans a wide range, and you’ll see many different numbers cited. The actual price will vary widely depending on the size and type of house you're building, the building materials used, and the location.

According to Redfin, the cost to build a home in 2025 was $138,937 – $531,294, with the average sitting around $323,026. Meanwhile, the National Association of Home Builders cites an even higher number: $428,215.

12 ideas to make building a house more affordable

So, what’s the cheapest way to build a house? Consider implementing one or more of the dozen tips discussed below.

1. Budget and plan carefully

Don’t wait until the end of your home build to be surprised by the cost. Create a budget and price out everything you expect to spend on your new home. While you may not have a perfect estimate at first, getting a handle on the building costs can help you throughout the process.

Whenever prices change or a cost gets added, put it into your budget – which should be a live document that changes as your plans change so you always know where you are in your spending and don’t go over your budget.

If you’re using a construction loan or another type of financing, your lender may require you to have a cost breakdown anyway. When you apply for mortgage preapproval, your lender will likely want to see how much you plan to spend on each step of the project. For that reason, it’s a good idea to have at least a rough budget before you start construction.

2. Choose the right home site

One of the most important considerations to the cost of building a home is the actual site that you build on. The home site can significantly impact your home building costs. In addition to the purchase price of buying land for your home, the layout of the lot makes a big difference. A flat lot with few trees will generally be easier (and cheaper) to build on than a forested or hilly lot.

Some of the other factors that the home site can affect the cost include the local land prices, cost of permitting and regulations, and available infrastructure (e.g., utilities, water).

3. Simplify your home’s layout

The cheapest way to build a home is to design a simple floor plan. Sticking to a compact floor plan that is square or rectangular can make the design and building more straightforward. A predesigned or stock floor plan can lead to faster permitting and efficiency. Rather than choosing a custom home design, consider a simpler floor plan and customizing it through decor and fixtures.

4. Choose a simple roof design

Another part of the home’s design to consider is the roof. The cost of a new roof depends on factors such as the square footage of the house, the materials used, the number of pitches, the steepness of the slopes. and length of the slopes. The simpler the roofing design, the less expensive it’ll be to build your own house.

The average price of a new roof installation ranges from $5,868 – $13,216, according to Angi. Choosing a simple roof design can help you keep your costs down. Another way to save money is choosing a more affordable roof type, such as asphalt shingles. Shop around to compare the costs of different roofing materials and styles before installing the best option for you.

5. Consider the cheapest types of homes to build

Certain nontraditional types of homes can be cheaper to build than traditional single-family homes. This includes some of the following types of houses:

• Tiny homes
• Kit homes
• Modular and manufactured homes
• Barndominiums
• Ranch-style homes
• A-frame homes

Depending on your situation, choosing a nontraditional type of home may allow you to save money over building or buying a single-family home.

6. Hire an experienced home builder

While hiring a contractor may seem like it would be more expensive than doing everything yourself, it can actually save you money. If you do choose to work with a home builder, hire an experienced one. While a home builder with significant experience might cost more than one with little to no experience, it’ll be worth it during the building process.

An experienced contractor can help you avoid unnecessary, costly, and time-consuming mistakes. Plus, they can advise you on different ways to cut costs and can help you get materials more affordably.

7. DIY as much as possible

Even if you’re working with a contractor or home builder, you can also look for opportunities to do some things yourself to save money. This is especially true if you have construction experience, but even relative novices might be able to do some work themselves. Make sure to coordinate beforehand with your contractor if you are planning on doing any of the work yourself.

Some of the projects that are easier to DIY include painting, laying flooring, and other jobs that don’t require a licensed professional. Other projects like plumbing and electrical work are probably best left to the pros, unless you have a lot of experience beforehand.

8. Get your design plans approved early

Designing your home can cost a lot of time and money. If you don’t get your building permits approved in a timely fashion, for instance, the construction on your new house could be delayed. Any changes you make to your building plan during the construction process can also add to the total cost of the build.

If you start building the house without getting your plans approved by your local municipality, you risk hefty fines (or worse, having to redo some of your already completed work). That’s why it’s important to get your plans approved early in the planning process before beginning construction.

9. Choose affordable building materials

Choosing cost-effective materials can help keep the project more affordable and within budget. Here are a few types of building materials to consider for your home’s construction.

• Reclaimed materials: Using reclaimed materials such as old barn doors or wood isn’t only trendy, but it can also save you money. Look for reclaimed doors, wood floors, windows and decorative items when planning the design of your house.
• Prefab panels: Prefabricated panels are wall panels that are custom-built inside a factory and shipped to the build site. Having the walls built indoors and shipped to the site ready to install can reduce the time spent on framing and drywalling.
• Precast concrete: Precast concrete is poured into a reusable mold, cured indoors and then shipped to the build site. Typically, precast concrete costs less than on-site pouring because it cuts down on on-site labor and can help prevent delays due to the weather.
• Shipping containers: This alternative housing option uses old shipping containers for the structure of the home. Since the structure is already intact, this type of housing can help you save money on construction costs.
• Cob: Cob is a mixture of straw, clay and subsoil. This earthen material is so thick that it provides thermal, energy-efficient benefits. Since most of the ingredients for cob can often be found cheaply (or even free), you can save a good amount of money on material costs.

10. Buy materials at a discount

Materials are one of the biggest costs of building a home. Reducing the cost of materials can significantly lower the total cost required to build your own home. When you begin shopping, consider asking each supplier if they offer a builder’s discount. If you’re constructing the house yourself, you may qualify for a discount on your building materials.

Your contractor might likewise be able to acquire any necessary building materials at a discount.

11. Keep water usage areas together

One tip to save money, according to the National Association of Home Builders, is to keep water usage areas near each other. Grouping kitchens, bathrooms, and laundry rooms near each other means you don’t have to run pipes all throughout the house. This can simplify the plumbing process and lower your cost of materials.

12. Add energy-efficient home features

The cost of building a home is not just the upfront costs that you have to pay. It’s smart to consider the ongoing costs of living in your home. Installing energy-efficient features in your new home can help you save money. Even though energy-efficient features may be more expensive up front, they can save you money in the long run by lowering your ongoing energy costs.

You might also be able to qualify for rebates and tax breaks for building certain energy-efficient elements into your home. Visit EnergyStar.gov to search for local, state and federal rebates for your energy projects.

The bottom line: You can build a home without breaking the bank

Home building can be a financially viable alternative if you’re thinking of buying a house but are limited by a tight budget. However, taking the more straightforward path of buying a preexisting home offers some clear advantages. Although you might miss out on some opportunities to save, you can avoid building costs and the unpredictability they bring.

You’ll want to consider the benefits of buying a home, including owning your own home faster and reducing the unpredictability and surprise expenses that come with building a home. If building a home sounds too complicated, an existing home might be your best option. While Rocket Mortgage doesn’t offer construction loans at this time, if you want to buy a home rather than build one, get started with Rocket Mortgage today.