Tiny teal house in a open field.

How Much Tiny Homes Really Cost: A Complete Guide

March 04, 2024 7-minute read

Author: Katie Ziraldo


Tiny houses have been growing in popularity for years. Part of the minimalist lifestyle, the tiny house movement is a real estate trend based on simplifying your life by downsizing your living accommodations, which ultimately leads to more financial freedom.

For young adults balancing high student loan debt and an increasing sense of wanderlust, this lifestyle is particularly appealing due to its lower costs and flexibility in location. Many believe that living with less will also bring more happiness and a stronger connection to the environment, as most tiny homes are greener than traditional ones.

But how much does a tiny house really cost? It’s true that these houses make it possible to achieve the dream of homeownership at a much lower cost than buying a traditional home, but with houses ranging between 100 – 400 square feet, there are several factors to consider when calculating your potential costs.

How Much Does A Tiny House Cost, On Average?

While the nationwide average cost of a tiny home is $300 per square foot compared to a traditional home’s $150 per square foot, tiny homes are overall cheaper to build or purchase. The average cost of a tiny house is a reasonable $30,000 – $60,000, although they can cost as little as $8,000 or up to $150,000 depending on the amenities you choose to include.

It’s typically cheaper to build a tiny house than to buy one prebuilt, but don’t get too caught up in the savings. You may underestimate the job you’re taking on by choosing to build yourself, as one small mistake can end up costing extra time and money to fix.

Beyond the decision to buy or build, other factors that will affect your overall cost include the following:

  • The size of the house

  • Whether you’re building on wheels or a foundation

  • The type of building materials used

  • Building permit costs in your area

  • Access to utilities

  • The type of amenities you choose to include

Because tiny homes are highly customizable, you will have more control over keeping costs low than you would when buying or building a traditional home.

How Much Does It Cost To Build A Tiny House?

Although building your tiny house is the cheapest option, you will still have significant upfront costs to manage. If you decide to build your tiny house, it’s important to mentally, physically and financially prepare for the journey ahead of you.

The reality is most tiny home builders spend anywhere between $20,000 – $60,000 on materials or more depending on your preferences or the supply of materials. Building permits average around $1,350 nationally, although larger floor plans and more custom materials will raise that price.

Tiny houses on wheels tend to be cheaper as well, as the foundation alone costs $4 – $7 per square foot, easily adding anywhere from $5,000 – $8,000 onto the overall project price.

How Much Does It Cost To Buy A Tiny House?

If building isn’t for you, there are also pre-built tiny homes available for purchase. There are prefabricated tiny home providers located across the country, many of which offer free shipping. Although you’re saving significant time and effort by buying a tiny house over building one, it is not uncommon for these prebuilt homes to cost $75,000 or more depending on the level of luxury included.

A cheaper option is to buy a preowned tiny house, as it’s not uncommon for these homes to cost as little as $30,000. However, buying preowned means sacrificing the level of control you have on how your space is set up. Tiny homes are often highly customized, so there may be additional expenses to adapt the space to your needs.

You can find tiny homes for sale in your area by searching local listings and national sites such as TinyHouseListings.com. Keep in mind most tiny homes will not qualify for a traditional mortgage, so owners often pay cash or take out a personal loan for additional funding.

See What You Qualify For


Type of Loan

Home Description

Property Use

Your Credit Profile

When do you plan to purchase your home?

Do you have a second mortgage?

Are you a first time homebuyer?

Your email address () will be your Username.
Contains 1 Uppercase Letter
Contains 1 Lowercase Letter
Contains 1 Number
At Least 8 Characters Long
Go Back


By submitting your contact information you agree to our Terms of Use and our Privacy Policy, which includes using arbitration to resolve claims related to the Telephone Consumer Protection Act.!

NMLS #3030
Rocket Mortgage Logo

Congratulations! Based on the information you have provided, you are eligible to continue your home loan process online with Rocket Mortgage.

If a sign-in page does not automatically pop up in a new tab, click here

Rocket Mortgage Logo

Unforeseen Costs Of Tiny Homes

In addition to obvious expenses such as purchasing land and building materials, there are some tiny home costs that you might not expect but you should prepare for just in case.

  • Zoning laws: Depending on where you live, zoning laws may affect how your house is built as well as where it is located. For example, it is illegal for your tiny house to be placed on a friend or family member’s land for free.

  • Utilities: Your tiny home will require access to water and electricity. Depending on the location, you may be able to easily hook up to local utilities. However, if your house is located off-grid, you may need to consider installing a septic system and/or renewable energy sources like solar panels.

  • Furniture and appliances: If the stuff you have in your full-sized home will not fit in your tiny home, you may need to buy new furnishings.

  • Storage: If your belongings will not fit in the much smaller space, you may need to rent a storage unit to hold them or consider donating or selling older items.

  • Home insurance: Getting tiny home insurance can be difficult and costly.

  • Resale value: Tiny houses are not guaranteed to appreciate in value in the same way a traditional home does. Tiny homes can actually depreciate in value, especially if it is highly customized. These homes also fall into a niche market, so it may be more difficult to sell your home down the line.

Take the first step toward the right mortgage.

Apply online for expert recommendations with real interest rates and payments.

The Financial Steps To Building Your Tiny Home

From finding the right piece of land to building or buying your house, there are many steps involved in creating your ideal small home.

1. Finding The Right Land

If you’re targeting a more permanent tiny home, meaning it is not placed on wheels, the first step will be finding and purchasing your land. Leasing land for a manufactured home is an easier option, but it is an investment that will depreciate in value overtime. It’s important to find land in the area you want to live in, while also considering local zoning laws and other restrictions that may affect your ability to build.

2. Taking Out A Land Loan

You can’t purchase a tiny house with a traditional mortgage, but there are other financing options for tiny homes. One common alternative is the land loan. Although Rocket Mortgage® does not offer land loans, we understand the importance of educating our clients on all their options.

Land loans are obtained in the same way home buyers would obtain a mortgage loan, but while a house for sale has a dollar amount assigned to it, it can be harder to determine the value of land when there is no property collateral. This makes land loans a higher risk for lenders, which leads to larger down payments and higher interest rates than a typical home loan.

Land loans are used to finance the purchase of a plot of land to either build a home or utilize it for business purposes. Types of land loans include raw land, unimproved land and improved land loans. The type of land loan you need will depend on where the land is located and what you intend to use it for.

In order to qualify for a land loan, you will need a significant down payment and good credit score. It can be challenging to get approved for these loans due to the lender’s potential risk, so it is crucially important that you create a solid, detailed plan for how you want to develop the land that you can show lenders, as your commitment to this plan may convince lenders that you pose a lesser risk.

3. Tiny House Price Shopping

Stick built tiny homes, which are built on a foundation and most similar to traditional houses, are easily the most expensive. But if you want to build without starting from scratch, you also have the option to purchase a tiny house shell, which has a finished exterior with an unfinished interior, allowing you to personalize the space for your needs. A standard shell ranges from $17,000 – $37,000, not including add-ons like electrical and plumbing.

There are also kit homes available that typically cost less than $10,000. These kits come with blueprints, a customized trailer to build upon and a list of needed supplies. Although this is a great idea for some people, we typically do not recommend any do-it-yourself methods to build your home without some sort of advanced construction experience.

Based on your budget, manufactured homes and modular homes are other types of tiny homes you may want to consider on your hunt for the right tiny house.

4. Financing Your Tiny House Construction

If you’re building your tiny home, a construction loan can help you get started. A construction loan is a short-term loan that covers the costs of custom home building. Once the home is built, the borrower must then apply for a mortgage to pay for the completed home.

There are several different types of construction loans, and determining which loan is right for you will depend on the amount of financing you need as well as the project you plan on executing. Rocket Mortgage does not offer most construction loans, although for current homeowners a cash-out refinance could be an option to access equity in your home and free up funds. There are also additional ways to save if you’re building a house on a budget.

The Bottom Line

Tiny homes aren’t for everyone. Despite their many benefits, the simple fact is that these homes are not easy to build despite their smaller size. If you’re ready to take the leap into a simpler lifestyle, be sure to consider all of the financial responsibilities involved to set yourself and your new home up for success.

Once you feel confident you know the differences between financing a conventional home and a tiny home, take action and start your mortgage application online with the Home Loan Experts at Rocket Mortgage.

Get approved to buy a home.

Rocket Mortgage® lets you get to house hunting sooner.

Katie Ziraldo Headshot

Katie Ziraldo

Katie Ziraldo is a financial writer and data journalist focused on creating accurate, accessible and educational content for future generations of home buyers. Her portfolio of work also includes The Detroit Free Press and The Huffington Post.